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.