A Room with a View — A Valuation of the Mediterranean Sea View

Aesthetic view is one of the ecosystem services of the Mediterranean Sea which can be estimated using price differences in the hotel market. Hotels situated on the Mediterranean Sea charge higher prices for a room with a sea view than for a room without it. The value of this view in 10 major Mediterranean regions was estimated in this paper using a hedonic price method. Data on 2,819 hotel rooms in high season and 2,406 rooms in the low season were collected from Booking.com and fixed effects regression was used to estimate the model coefficients. Hotel room prices were found to be higher by about 10% for a room with a view than for one with no view specification. No significant difference was found between regions or season. These findings lend support to the fact that the view of the Mediterranean is equally valued in all regions. Keywords: Sea view, Mediterranean, Hedonic prices, Fixed effects regression JEL Q51

[1]  Notie H. Lansford,et al.  Recreational and Aesthetic Value of Water Using Hedonic Price Analysis , 1995 .

[2]  S. Rosen.  Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition , 1974, Journal of Political Economy.

[3]  Jeffrey M. Wooldridge,et al.  Introductory Econometrics: A Modern Approach , 1999 .

[4]  M. Fluvià,et al.  Public Goods in Tourism Municipalities: Formal Analysis, Empirical Evidence and Implications for Sustainable Development , 2007 .

[5]  Lars Nesheim,et al.  Identification and Estimation of Hedonic Models , 2003, Journal of Political Economy.

[6]  J. M. Santos.  The economic valuation of landscape change: theory and policies for land use and conservation. , 1998 .

[7]  Raymond B. Palmquist.  Property Value Models , 2005 .

[8]  P. Pashardes,et al.  Using Brochure Information for the Hedonic Analysis of Holiday Packages , 2005 .

[9]  W. Greene,et al.  计量经济分析 = Econometric analysis , 2009 .

[10]  Pravin K. Trivedi,et al.  Microeconometrics Using Stata: Revised Edition , 2010 .

[11]  Pravin K. Trivedi,et al.  Microeconometrics Using Stata , 2009 .

[12]  N. Bockstael,et al.  EVIDENCE OF THE EFFECTS OF WATER QUALITY ON RESIDENTIAL LAND PRICES , 2000 .

[13]  E. Ariza,et al.  The effects of beach characteristics and location with respect to hotel prices , 2011 .

[14]  C. Bianchi,et al.  Marine Biodiversity of the Mediterranean Sea: Situation, Problems and Prospects for Future Research , 2000 .

[15]  R. Lilieholm,et al.  The Economic Value of Open Space: A Review and Synthesis , 1999, Environmental management.

[16]  K. McConnell,et al.  Valuing Environmental and Natural Resources , 2002 .

[17]  Andreas Papatheodorou.  Exploring Competitiveness in Mediterranean Resorts , 2002 .

[18]  P. Allison.  Fixed Effects Regression Models , 2009 .

[19]  Germà Coenders,et al.  Effect on Prices of the Attributes of Holiday Hotels: A Hedonic Prices Approach , 2003 .

[20]  Christer Thrane.  Hedonic Price Models and Sun-and-Beach Package Tours: The Norwegian Case , 2005 .

[21]  V. Smith,et al.  Can Markets Value Air Quality? A Meta-Analysis of Hedonic Property Value Models , 1995, Journal of Political Economy.

[22]  J. Alegre,et al.  Determinants of the Price of German Tourist Packages on the Island of Mallorca , 2001 .

[23]  A. Israeli.  Star rating and corporate affiliation: their influence on room price and performance of hotels in Israel. , 2002 .

[24]  N. Bockstael,et al.  Spatial landscape indices in a hedonic framework: an ecological economics analysis using GIS , 1997 .

[25]  A. M. FreemanIII,et al.  Hedonic Prices, Property Values and Measuring Environmental Benefits: A Survey of the Issues , 1979 .

[26]  J. Alegre,et al.  Examining the Market Structure of the German and UK Tour Operating Industries through an Analysis of Package Holiday Prices , 2003 .

[27]  A. Fleischer,et al.  Measuring the recreational value of agricultural landscape , 2000 .

[28]  J. Hamilton,et al.  Coastal landscape and the hedonic price of accommodation , 2007 .