Measuring the Impact of Church Externalities on House Prices

Abstract

This study extends literature that empirically investigates the impact of the externalities generated by churches on prices of nearby residential properties with particular reference to selected areas in Lagos, Nigeria; but with some implications for economic studies in other parts of the world The study hypothesized that the proximity of a church has nosignificant effect (positive or negative) on house prices. The hypothesis is tested with a standard hedonic pricing model using the net rents of 450 apartments (flats) across the study area. The results confirmed the more common belief that neighborhood churches, particularly the larger ones, impact on the values of nearby residential properties negatively. It is further revealed that where a more powerful positive externalities exists side-by-side, the effects of the negative externalities can be considerably tempered or completely overshadowed. The results bring to light the environmental, social and economic (the triple bottom line) implications of the externalities generated by neighborhood churches in the study area. It is expected to assist urban planners, the courts, mortgagees and real estate valuers in resolving the controversies on the nuisance versus amenity effects of neighborhood churches.