Abstract
When a household chooses a residential land, it takes account of its neighborhood setting. Since the rent of a land is supposed to be a function of its environmental attributes as well as its site characteristics, the valuation of the environmental attributes of a household can be derived from the relation.
This paper explores some possibilities for imputing an index of the environment among districts in an urban area by using rent data. The values of environmental attributes are estimated, multiplied by the corresponding attributes and summed to obtain a score for each district.
Various methods are proposed to construct an all-inclusive index of the environment. The choice of weights and units is crucial to synthesize individual indices. This method seems superior to those in the sense that the index is derived from households' own preferences and expressed in terms of money.
