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On prisoner's dilemmas and gilded cages: The economics of heritage preservation

Author

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  • Gabriel Ahlfeldt
  • Kristoffer Möller
  • Sevrin Waights
  • Nicolai Wendland
Abstract
Assuming that owners are fully compensated for the costs and benefits through the prices they pay for properties, we investigate the effects conservation areas have on value in England in a spatial hedonic analysis of property prices. Controlling for a particularly rich set of property and location attributes as well as unobserved spatiotemporal heterogeneity, our conditional estimates indicate a premium of about 8.5% for otherwise comparable properties located inside a conservation area. We detect heritage externality effect, which accounts for up to 4% of the value of properties located just outside conservation areas and becomes statistically indistinguishable from zero after about 500m. Within conservation areas, moving into the centre where heritage density is highest increases the premium by up to 100% compared to a location at the edge the conservation area boundary. The results from a spatiotemporal analysis indicate that the premium attached to a location inside as well as near to a conservation areas has significantly increased over time, but that the formal act of designation does not exhibit a statistically significant impact on property prices inside a conservation area. Joint with a moderate, but significant and decline in relative prices just outside the boundaries, the pattern of results does not support the presence of a supply driven increase in prices.

Suggested Citation

  • Gabriel Ahlfeldt & Kristoffer Möller & Sevrin Waights & Nicolai Wendland, 2012. "On prisoner's dilemmas and gilded cages: The economics of heritage preservation," ERSA conference papers ersa12p783, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa12p783
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    References listed on IDEAS

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    Cited by:

    1. Felix Richter, 2014. "Winner Picking in Urban Revitalization Policies: Empirical Evidence from Berlin," ERSA conference papers ersa14p1424, European Regional Science Association.
    2. Mark van Duijn & Jan Rouwendal & Richard Boersema, 2014. "Transformations of Industrial Heritage: Insights into External Effects on House Prices," Tinbergen Institute Discussion Papers 14-122/VIII, Tinbergen Institute.
    3. Kristoffer Moeller, 2013. "Culturally clustered or in the cloud? Location of internet start-ups in Berlin," ERSA conference papers ersa13p455, European Regional Science Association.
    4. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2017. "Zoning in reunified Berlin," Working Papers 059, Chair for Economic Policy, University of Hamburg.
    5. van Duijn, Mark & Rouwendal, Jan & Boersema, Richard, 2016. "Redevelopment of industrial heritage: Insights into external effects on house prices," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 91-107.
    6. ., 2014. "Urban policies," Chapters, in: Urban Economics and Urban Policy, chapter 8, pages 185-218, Edward Elgar Publishing.

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    More about this item

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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