| dc.description.abstract | The purpose of this paper is to investigate the effect of air pollution on housing prices in Taiwan. Due to the scattered distribution of air quality monitoring stations, the air pollutant concentrations across Taiwan are not well captured. To address this problem, the Kriging Interpolation is implemented in this paper. In addition, it has been well acknowledged that air pollution and housing price are endogenously determined. We then use rainfall as an instrumental variable for air pollution concentrations to perform two-stage least squares. The data used in this paper are the air quality monitoring data of the Environmental Protection Administration, and the actual price registration data of the Department of Land Administration, M.O.I. in Taiwan from January 2012 to October 2017. We use IAQI, AQI, PM2.5, PM10, O3, CO, SO2 and SO2 as a measure of the severity of air pollution. The empirical results find that the air pollution in the previous month had a negative and significant impact on the housing prices. Particularly, when the concentration of these air pollutants increase by 1%, the housing prices decrease by 0.036% to 0.137%. However, the findings also suggest that the air pollution in the previous quarter had no statistically significant impact on the housing prices. In summary, our results show that the effect of air pollution on the housing prices is significant in the short term. | en_US |