Remotely sensed proxies for environmental amenities in hedonic analysis: What does “green” mean?

This chapter focuses on the new and innovative use of remote sensing in hedonic price analyses, either to control for amenities or to proxy difficult-to-measure environmental amenities or ecological benefits that are the subject of valuation. Remotely sensed vegetation indices hold some promise in differentiating such “green” amenities and as a proxy for other amenities in arid or semi-arid areas, such as flowing water or cooler temperatures. Vegetation indices are a new tool that can control for vegetation and new research should help determine the reliability and potential usefulness of such information as an indicator of site-specific environmental amenities. The improvement would require the researcher to use a series of normalized difference vegetation index or soil-adjusted vegetation index images at dates coincident with the known leafing out times of the target species. Remote sensing of vegetation in a semi-arid riparian habitat is complicated by fragmented vegetation cover and species-rich habitats.