The Hedonic Pricing Method is one of the principal assessment methods
for evaluating services and resources not normally exchanged on the
market. However, the method is often unable to account for the great
variety of qualities in an urban context and faces scarce and
heterogeneous market data. This paper presents a model for the valuation
of benefits generated by environmental and urban improvement
investments adopting a mixed hedonic- multi-attribute procedure for
modeling a value function of urban real estate values. The peculiarity
of the model is that the  independent variables are aggregated
indicators, which synthetize  more detailed characteristics. Using the
expertise of real estate  agents, all relevant variables influencing
real estate values were  weighted and synthetized in a set of cardinal
indicators. Next,  market prices were used to calibrate a hedonic
function that  transforms the cardinal indicators into real estate
values. The valuation model was integrated into a GIS for mapping the
housing value, and its variation induced by urban investment. The
proposed model pointed out plausible and robust results, in  particular,
the possibility to use any available information, such as  location,
position, technical and economic characteristics of  buildings, and
organize it in a flexible and transparent way, and to  keep evident the
role of each characteristic through the  hierarchical structure of the
model. The model was applied to the  real estate market of Venice to
test the effects of the MOSE project (Electromechanical Experimental
Module) for the protection of  Venice from high tides. The results of
the application showed a  relevant increase in real estate values in the
center of Venice,  especially related to property in ground floor
units, of about 1.4 billion Euros.

The Hedonic Pricing Method is one of the principal assessment methods for evaluating services and resources not normally exchanged on the market. However, the method is often unable to account for the great variety of qualities in an urban context and faces scarce and heterogeneous market data. This paper presents a model for the valuation of benefits generated by environmental and urban improvement investments adopting a mixed hedonic- multi-attribute procedure for modeling a value function of urban real estate values. The peculiarity of the model is that the  independent variables are aggregated indicators, which synthetize  more detailed characteristics. Using the expertise of real estate  agents, all relevant variables influencing real estate values were  weighted and synthetized in a set of cardinal indicators. Next,  market prices were used to calibrate a hedonic function that  transforms the cardinal indicators into real estate values. The valuation model was integrated into a GIS for mapping the  housing value, and its variation induced by urban investment. The  proposed model pointed out plausible and robust results, in  particular, the possibility to use any available information, such as  location, position, technical and economic characteristics of  buildings, and organize it in a flexible and transparent way, and to  keep evident the role of each characteristic through the  hierarchical structure of the model. The model was applied to the  real estate market of Venice to test the effects of the MOSE project (Electromechanical Experimental Module) for the protection of  Venice from high tides. The results of the application showed a  relevant increase in real estate values in the center of Venice,  especially related to property in ground floor units, of about 1.4 billion Euros.