The Korean Economic Review
The Value of an Apartment with Sunlight and a View: A Quasi-Experimental Analysis
Hyunki Hong (Eugene Asset Management), Hoyong Jung (Kookmin University) and Duol Kim (Myongji University)Year 2024Vol. 40No. 1
The Vert-Vill apartments consist of two 32-story buildings of similar structure: Vert-Vill 101 and 102. The tenants enjoyed a beautiful view and sunlight without interruption. However, the construction of The Lucky Golden Suite three meters from Vert-Vill 101 removed Vert-Vill 101’s sunlight and view entirely without impacting Vert-Vill 102. We performed a difference-in-difference analysis using this experimental circumstance and found that access to sunlight and a view account for 18.0% of apartment prices. Our findings suggest that conventional hedonic analysis, which contains the risk of omitted variable bias, may generate biased estimates.