Neighborhood green and services diversity effects on land prices: Evidence from a multilevel hedonic analysis in Luxembourg.

The article aims at revealing the role of green space diversity and the mix of neighborhood services on the price of residential land in Luxembourg. We use a multilevel approach to estimate a hedonic model in order to benefit from the hierarchical structure of the data and to reveal spatial heterogeneity in the valuation of these neighborhood qualities. In addition to standard accessibility and socio-economic variables, we include geographical variables in the form of neighborhood mix indices and a Shannon diversity index of land-uses. Via a spatial cross-regressive specification we also test whether our nested levels are able to capture most of the spatial dependence. Our results show that the presence of a mix of services and green space does not directly impact prices, but that the diversity of land-uses (Shannon index) matters, and has negative effects when considered within immediate proximity and positive effects within a walking distance. Land use effects however vary spatially and emphasize the contrast between regions that are particularly attractive and picturesque, and the former industrial conurbation. In our case we also show the ability of the multilevel approach to capture spatial auto-correlation effects.