| As one of main sources of urban pollution,waste plants often release foul gases which can be toxic and leak waste leachate contaminating water resource,threatening the surrounding residents' health and their quality of life.For this study,we developed a hedonic price model and utilized a series of specifications to assess the influence of waste plants on house values,in which the most important characteristic of houses we focused on is whether they are located around waste plants.We applied a fixed effects model to control for the omitted variable bias,by adding dummy variables about different districts of Beijing and different years in the period we focused on.In the second step of the study,we used selection models to produce price counterfactuals for the houses near or far from waste plants.We applied the Heckman Sample Selection model to control for the sample selection bias and produce price counterfactuals for the houses near or far from waste plants.Then,we could get the house price differences between expected prices and counterfactual prices,by which we could estimate the cost of environmental externality caused by waste plants.Finally,we conducted paired t-tests for houses near and far from waste plants in expected prices vs counterfactual prices,verifying the existence of sample selection bias.Overall,our study has revealed the relationship between house price differential and waste plants.Firstly,waste plants generate a negative effect on the prices of the houses located within 3 kilometers around them significantly with other conditions unchanged,.Secondly,there are obvious differences between expected prices and counterfactual prices of houses in both cases,which verify the existence of sample selection bias.Finally,it is found that,when a house is located within 3 kilometers around waste plants,the impacts on its price from other factors(such as transport facilities and greening condition)will be weakened. |
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