A Hedonic Rental Price Model for the Canton Zurich

Abstract

Two types of hedonic rental price models are applied to the Canton Zurich in this thesis. The first one is a spatially autoregressive model, the second one a geographically weighted regres- sion. The focus is on environmental variables including different distance and area based land use related variables as well as visibility, noise and air pollution. In addition, an attempt to in- troduce qualitative environmental aspects is made. Results show that environmental variables are important and variables related to lakes (distance, area in neighbourhood and visibility), parks (distance), panorama of mountains and noise are most important amongst environmental variables. Tenants are willing to pay higher monthly rents for larger flats (18 CHF/m2), flats built after 1991 (185 CHF), proximity to parks (100 CHF/km) and lakes (13 CHF/km), for street (2.50 CHF/dB(A)) and railway (3.50 CHF/dB(A)) noise reduction and for visibility of lake surface (0.72 CHF/ha) and mountaintops (10.30 CHF/top). In order to measure ecosystem services, more accurate qualitative data is needed, as the approaches used in this thesis suggest. Nevertheless, results show that improvements in environmental conditions may help to tackle trends such as increasing living space per person or urban sprawl and the corresponding in- crease in travel distance per person and day.