ECONOMICS UNIQUENESS

INVESTING IN THE SENSE OF PLACE ■ 23
existing dwellings as well as in some new construction, all of which would add to
ΔV. Last but not least, tasteful architectural renovation and the successful preservation
of a sense of place should make the intervention area a more pleasant
place to live and work. Th is should also lead to higher property prices, even in the
absence of any additional tourism to the area.
An Urban Economics Approach
Th e urban economics approach, on the other hand, relies on direct estimates of
property prices (Ost in this volume). Th e unit of observation for the analysis is
not the citizen’s response to a questionnaire but the cadastral record. A typical
cadastral record contains information on the main features of a land plot and the
buildings standing on it, such as their commercial or residential nature, their estimated
price, the land surface, the built surface, the number of stories, the nature
of sanitation, and the like. Th rough the geo-referencing of records, it is also possible
to estimate the distance of a plot to historic landmarks, to buildings with
architectural value, and to a range of amenities. Even when cadastral records are
not detailed or reliable enough, or are altogether missing, it is possible to collect
this information through specially conducted door-to-door surveys.
Information from cadastral records or surveys can in turn be combined to
generate hedonic price functions. Th ese are statistical relationships between the
price of a property, its own features, the nature of the infrastructure services available
to it, the value of other properties in the area, and the like. In the context of
urban upgrading projects with a cultural dimension, it makes sense to also link
the price of a property to its own architectural value and to the heritage value of
the area considered as a whole. Hedonic price functions are estimated through
econometric analysis. Even if functions of that sort cannot be constructed for
the intervention area, functions from suitably similar areas can be used for the
analysis.
A hedonic price function allows simulating the eff ects of the project on the
prices of properties in the intervention area. Th is can be done by modifying the
level of key arguments in the function, including improved urban infrastructure,
investments by local residents, and upgrading of historic landmarks and buildings
with architectural value. Simulations should also involve estimating property
prices in the event of a complete decay or disappearance of historic landmarks
and buildings with architectural value if the project was not undertaken.
Th e simulations could be conducted for each property i in the intervention
area, or they could consider relatively homogeneous groups of properties (such as
single-dwelling buildings of generic architecture, decayed buildings with architectural
value, or other). But even in this clustered version they would involve a
considerable level of disaggregation, which is why exercises of this sort are called