Conference Agenda

This paper investigates how ocean water quality affects residential property values in a rapidly urbanizing coastal city in a developing country—Shenzhen, China. Despite growing global concerns over marine environmental degradation, causal evidence on its economic impact remains scarce, particularly in emerging economies. We combine daily housing transaction data from 2,819 residential complexes (2017–2019) with two marine pollution datasets: monthly chemical indicators from China’s Seawater Quality Monitoring Information System and daily satellite-derived chlorophyll-a (CHL) concentrations from the Copernicus Marine Service. Using a hedonic pricing model, we estimate that a 1 µg/L increase in CHL leads to a 0.12% decrease in unit housing prices, translating to a ¥65.36/m² reduction. To explore behavioral mechanisms, we employ a two-stage model showing that CHL significantly raises PM2.5 levels, which in turn reduce property values—suggesting marine pollution affects the housing market indirectly through more salient air pollution. Further interaction analysis reveals a sub-additive effect between CHL and PM2.5, consistent with bounded environmental perception. These results provide the first evidence of marine pollution’s capitalized cost in a major Chinese city and demonstrate how less visible environmental risks are internalized through more perceptible hazards. The findings inform both coastal environmental regulation and urban housing policy in developing contexts.