ECONOMICS UNIQUENESS

96 ■ THE ECONOMICS OF UNIQUENESS
correlated with the variable of interest; for instance, an architectural feature that
is typical for a particular period or style.
Despite some important limitations, the use of hedonic price analysis may be
promising for gaining a better understanding of the value of cultural heritage. In
particular, the recently emerging availability of large databases—constructed, for
instance, by the land registry or cadastral offi ces—may lead to detailed information
on transactions in the real estate market. Such data systems are especially
useful if they comprise disaggregated data on the characteristics of the properties
sold. In this context, Geographic Information System (GIS) techniques oft en
off er the possibility to further enrich such data with mapping of information
about geographic neighborhood characteristics. With such data, the problem of
omitted variables can be mitigated considerably, while the large number of observations
enables the analyst to incorporate a satisfactory number of moderator
variables.
Th e literature off ers various hedonic price studies on cultural heritage, sometimes
in relation to the designation of a building as cultural heritage through the
“listing” process (Coulson and Lahr 2005; Leichenko et al. 2001). Th e fi rst study
estimating a full hedonic price function was undertaken by Ford in the American
city of Baltimore (Ford 1989); in his reports, a positive impact of designation on
property values was found. More recently, a study used a hedonic price function
to estimate the market price diff erence between listed heritage and regular,
unlisted houses in Sydney’s upper North Shore (Deodhar 2004). A hedonic pricing
method was also used to monetize housing value with respect to cultural
heritage in the old Hanseatic town of Tiel in the Netherlands (Ruijgrok 2006).
Th e author found that historical characteristics had a positive impact of almost
15 percent. Insights into the diff erent eff ects that property designation and district
designation have on property value is off ered by Noonan (2007). He estimates a
hedonic price function on data from the Multiple Listing Service of northern Illinois,
United States, which includes Chicago. As explanatory dummy variables, an
indicator for allocation in a designated historic district (“district”) and an indicator
for historic designation of an individual property (“landmark”) are included.
Prices of landmarks are higher than those of otherwise comparable houses, while
for districts a smaller premium is estimated.
Th ere are several hedonic studies that evaluate architecture and focus on
architectural quality in a city (Hough and Kratz 1983; Ruijgrok 2006; Vandell and
Lane 1989; Moorhouse and Smith 1994). Several authors have looked specifi cally
at architectural style, details of façade features, historical or architectural quality,
and similar factors. For example, in their study that asked “Can ‘good’ architecture
meet the market test?” Hough and Kratz (1983) investigated the way the
offi ce market of downtown Chicago values “good” architecture and concluded
that a considerable rent premium is paid for “good” new architecture, but not for