Implementing hedonic pricing models for valuing the visual impact of wind farms in Greece.

Although wind energy is a pollution-free and infinitely sustainable form of energy, there is considerable concern over certain environmental effects resulting from its development. Criticism focuses primarily on the visual impact of wind turbines and transmission lines, which may result in perceived deterioration of the landscape and also harm other economic activities such as tourism and real estate. This study applies the hedonic pricing method to estimate the value of environmental externalities associated with large-scale exploitation of wind power at a local level. It examines the characteristics of approximately 1,800 sales of single-family homes surrounding 17 existing wind facilities in two Greek islands, namely Evia and Kefalonia. Four different hedonic price models are developed and applied, with diverging results in the two areas. We find that in Evia, the per unit floor area sales price decreased for dwellings located within a 2 km radius of the wind farms, while in Kefalonia, the distance of the house to the wind turbines had no statistically significant effect on the sales price. • Hedonic pricing is used for valuing environmental impact of wind power. • 1,800 home sales surrounding 17 wind facilities in two Greek islands examined. • In Evia, home values are reduced within a zone of 2 km from the wind farms. • The external cost of wind energy was estimated at €2.59/MWh. • In Kefalonia, wind farms do not influence the sale prices of properties. [ABSTRACT FROM AUTHOR]