From peaks to prices: the economic impact of natural amenities on alpine real estate values

This study aims to analyse the effects of environmental and climate (dis)amenities on house prices in the Italian Alps. Drawing on a dataset containing 447 sales contracts, this research adopted two modelling approaches: the classical hedonic model, estimated via ordinary least squares and a spatial model. Combining hedonic models with spatial models offers insights into studying property prices in alpine areas by capturing spatial dependencies of neighbouring areas, thus avoiding biased estimates and improving model accuracy. We show that higher winter temperatures significantly decrease property prices, reflecting preferences for higher altitudes with reliable winter sports conditions. Increased forest cover also negatively impacts prices, suggesting a preference for traditional alpine landscapes with panoramic views. Energy-efficient dwellings, however, command higher prices, indicating their value in the market. We contribute to the literature by (1) exploring the relationship between house prices and natural amenities in the European Alps; (2) using transaction data instead of property listings in Italy to provide more accurate estimates and (3) accounting for spatial autocorrelation to enhance the robustness of our analysis. Beyond addressing those gaps, our findings provide insights for land use planning and support the development of diversified and sustainable tourism strategies.