Air Pollution and Housing Prices across Chinese Cities

In recent years, China's air pollution has drawn worldwide attention and has become a challenge for the Chinese government. Air pollution adversely impacts not only human health, but also property values. Employing the air pollution and housing price data covering 282 prefecture-level cities in China, this article confirms that air pollution has been negatively capitalized into cross-city housing prices. In addition, this article applies the local geographically weighted regression (GWR) model to unveil the spatial variation of air pollution's capitalization effects on housing prices across different cities. Because air pollution will negatively impact housing prices, considering the benefits of air quality can help the government to create public policies intended to address air pollution, as well as help the public to improve both awareness regarding the environment and willingness to pay for improved air quality. Combing ordinary least squares (OLS) and GWR, this research serves to improve our understanding of air pollution's capitalization effects on housing prices across Chinese cities. (C) 2019 American Society of Civil Engineers.