The Impact of Natural Amenities on Home Values in Western Colorado

Introduction

This paper studies the relationship between home values and the proximity to natural and recreational amenities using GIS and three different regression models. Specifically, the paper examines the implicit price that home buyers are willing to pay to be located near trails, golf courses, open space, parks, public lands, and rivers, controlling for other characteristics of the home. The study employed GIS to create a database of homes sold from 2013 to 2015, with each amenity’s distance to each home calculated. The goal is to determine the value to home buyers of the following natural amenities: proximity to trails, U.S. public lands (Bureau of Land Management (BLM), U.S. National Parks (most specifically - the Colorado National Monument), local and state parks, other open spaces, the Colorado and Gunnison Rivers, and golf courses. The regression techniques used to determine the impact of these amenities on home prices include ordinary least squares (OLS), a fixed effects model (FE) controlling for time and zip codes, and a spatial error model (SEM) that controls for spatial effects. The models control for standard house characteristics, as well as socioeconomic characteristics of neighborhoods and disamenities.