The Impact of Technical and Non-technical Measures of Water Quality on Coastal Waterfront Property Values in South Florida

Due to the unprecedented population growth and increased economic activity in coastal areas, the health and hence value of coastal waterbody resources have been the subject of interest in recent years. In this article we estimate the value of a healthy waterbody through a hedonic property price analysis utilizing water quality as the amenity of interest. We compare hedonic analysis results using technical measures of water quality to the results using a non-technical measure of water quality location grade available in an urban coastal housing market of South Florida. Our results indicate that water quality improvement is associated with higher property values. In the comparison between technical and non-technical measures of water quality, we find that the technical measures provide better prediction of housing prices than the non-technical location grade. We further impute implicit prices for water quality improvement where significant mean willingness-to-pay (WTP) estimates range from $7,531 to $43,158.