Market versus public provision of local goods: An analysis of amenity capitalization within the Metropolitan Region of Santiago de Chile

摘要

The liberalization of the Chilean economy since 1974 has generated important modifications on its urban development policies. However, little attention has been paid to estimate how urban amenities are capitalized in housing prices under this new scenario. In this paper, we explore this relationship through a hedonic pricing model and 27 urban amenities for the Chilean main urban agglomeration, the Metropolitan Region of Santiago (MR). We recognize that the capitalization of urban amenities into housing prices is spatially heterogeneous, therefore we study this relationship by using the geographically weighted regression (GWR). The main results suggest that urban amenities play an important role in determining housing prices with a significant spatial heterogeneity, where notably differences between public and private local services are found. Particularly, private services such as schools, shopping centers, healthcare centers or restaurants have positive capitalizations on housing prices. In contrast, public schools, public hospitals and public kindergartens have negative valuations in housing prices, suggesting that living closer to these services reduces housing values. Our results provide policy makers with valuable elements when designing urban policies in terms of the importance of heterogeneous valuations of urban amenities across neighborhoods, how to allocate resources more efficiently to foster the quality of life on new urban residents and the need of considering the economic segregation triggered by heterogeneous preferences to amenities across space.