Have Housing Prices Gone With the Smelly Wind? Big Data Analysis on Landfill in Hong Kong

Rita Yi Man Li and Herru Ching Yu Li (2018) Have Housing Prices Gone With the Smelly Wind? Big Data Analysis on Landfill in Hong Kong, Sustainability 2018, 10(2), 341, Doi/10.3390/su10020341

19 Pages Posted: 2 Jun 2018

See all articles by Rita Yi Man Li

Rita Yi Man Li

Hong Kong Shue Yan University; Hong Kong Shue Yan University

Herru Li

Hong Kong Shue Yan University

Date Written: January 29, 2018

Abstract

Unlike many other places around the globe, Hong Kong is a small city with a high population density. Some housing units are built near the sources of an externality, such as a landfill site. As the blocks of buildings are particularly tall, many are walled buildings that block the bad odor from the landfill. Thus, the wind blowing from a landfill site may not affect the entire building estate. Some buildings are more heavily affected than others, partly because walled buildings built near landfills are rare. Only a few studies currently examine the correlation between wind direction and the prices of walled buildings. In this paper, we aim to bridge this research gap by illustrating Hong Kong as a case study. Most previous research studies only examine a few factors affecting housing prices. Modern big data is characterized by its large volume of data, which includes various types of data that analysts would not necessarily sample, but instead merely observe to track what happens. Therefore, another innovative point of our paper, is that we adopt a big data approach to study this issue. In this aspect, this paper is the first of its kind. There are 53,071 observations in the 1999 to 2014 data set, with 2,175,911 data entries. Our results reflect that when more municipal solid waste is sent to the South East New Territories Landfill, residents’ complaints in Tseung Kwan O increase. However, entire property prices in the region also increase, which rejects our hypothesis. We speculate that as more people become aware of the housing estate due to complaints, with only a limited number of housing units affected by the smell, since the wind usually only blows in certain directions, the “advertisement effect” originating from complaints about the bad smell boosts the property prices of the unaffected units. That is, people become aware of the existence of the property, visit the site, and discover that only specific units facing one particular direction are affected. Then, they purchase units that are unaffected by the smelly wind, leading to an overall increase in property prices. The study’s results may provide a new perspective on urban planning, and possible implications for other cities in view of the constant increase in population and expansion of landfill sites.

Keywords: Landfill; Property Prices; Externality; Wind Direction; Advertisement

JEL Classification: R14; R21

Suggested Citation

Li, Rita Yi Man and Li, Rita Yi Man and Li, Herru, Have Housing Prices Gone With the Smelly Wind? Big Data Analysis on Landfill in Hong Kong (January 29, 2018). Rita Yi Man Li and Herru Ching Yu Li (2018) Have Housing Prices Gone With the Smelly Wind? Big Data Analysis on Landfill in Hong Kong, Sustainability 2018, 10(2), 341, Doi/10.3390/su10020341 , Available at SSRN: https://ssrn.com/abstract=3117377

Rita Yi Man Li (Contact Author)

Hong Kong Shue Yan University ( email )

HK

Hong Kong Shue Yan University ( email )

10 Wai Tsui Crescent
Braemar Hill Road
North Point
Hong Kong

Herru Li

Hong Kong Shue Yan University

10 Wai Tsui Crescent
Braemar Hill Road
North Point
Hong Kong

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