Impact of resuscitation of Ichamoti river, Pabna on urban land price by using hedonic pricing model

Abstract

Inrecentyears,manyriversandcanalsintheBangladeshRiverBasinhavedriedupordiedduetolossofhydrologicalconnectivitiesbetweenriversduetonaturalandanthropogenicinterventions.Moreover,thedegradationofurbanriverecosystemsposesaseriousthreattosustainableurbandevelopmentandgovernmentsneedtomakehugeinvestmentstorevitalizethesehydrologicallinks.Investinginenvironmentalrestorationiscontestedamongdecision-makersindevelopingcountrieswherereturnoninvestmentisprioritizedoverprojectinvestment. Inadditiontomarketbenefits,therearehugenon-marketbenefitsagainstenvironmentalrestorationthatareunderestimatedduetolackofadequateinformation.Thisstudyisbeingconductedtoassesstheimpactof the IchamotiRiverresuscitationonmunicipallandvaluesandhelpdecision-makersassessthebenefitsoftheproject. In this study, the Hedonic Pricing Model (HPM) is applied to understand the relationship between theriver ecosystem and urban land prices. Five attributes: locational, environmental, municipal and city attributes are taken to develop the model. A comparative analysis among linear, log-linear, log-log and linear-log functional forms is conducted for the study. Finally, aMultiple Linear Regression (MLR) model is chosen by testing the major five assumptions of the regression model: linearity, multicollinearity, normality, auto-correlation and homoskedasticity. From the result of the model, the impact on land price is predicted.Two scenarios are assumed to predict the impact of the resuscitated river. One is a free-flowing and navigable river all yearround and the other is a seasonally free-flowing river. In this study, statistical analysis is shown with the social perceptions of city dwellers. In social perception, distance from the city center is the top priority (40% of respondents) when determining the price of land. The other parameters are road & transportation facilities, drainage facilities, mix use potentiality and distance from the river.Distance to river is treated as the lowest priority (58%) of the five main parameters. This is because the urban environment cannot offer advantages and comforts yet. However, people complained about the negative externalities of mosquitoes breeding in river dumps and 500meters buffer zones. The study also addressed the possible impact of river resuscitation on urban land prices. About 72% of the respondents replied about the possibility of land value increase. In the analysis, the log-linear form of the HPM explains approximately 85% variability of the response data around its mean by the listed variables which is the highest among the four forms of the HPM. The result of the model is statistically significant (p=0.001). The result shows significance at a 90% confidence level for the variables: healthcare service center, major landuse type, ratio of road length (>8 feet) to total road length, Euclidean distance from river, walking distance from nearest college and ratio of built-up areas excluding waterlogging condition of the clusters of the study area. The model predicted no significant relationship between environmental attributes and land prices in the final HPM. In consequence, the resuscitation of the Ichamoti River will not have any environmental impact on land prices. Therefore, without the free flow of rivers, there would be no added value to land values in the study area, given current land exchange trends. After river resuscitation, visionary landowners will create market demand for many environmental benefits.People may be willing to pay for services that increase the price of their land if they enjoy the benefits of the environmental attributes produced by regenerated rivers. The model predicted that the free-flowing river all year round had a positive impact on the land price. Revitalization of rivers will accelerate riverside commercialization with the navigation route. Therefore, changes in land use patterns affect land prices. Out of 25 clusters, 14 will benefit more or less from rising land prices. The biggest impact is seen in the projected value added of the Central Business District (CBD) at 20.90lacs BDT/decimal (68.98% increase in price). In the Library Bazar area, the price will be nearly double (87.35% increase) to present land price. At Shibrampur, Library Bazar, Kachari Para,Narayanpur andGhosh Para around the CBD, the average price is estimated at 6-9 lacs BDT per decimal. Poilanpur has the least impact on land prices at 0.92lacs BDT. The impact should occur within 400-500 meters of the river. In the CBD the impact is greater and on the periphery, it diminishes at a decreasing rate in line with the evolution of the actual price of the land.