Recall the goal of this research is to utilize the hedonic
property value model to estimate the implicit values of
ambient water quality within a watershed. We used the
semi-logarithmic functional form to estimate the hedonic
price function where the natural logarithm of the real sale
price for each property ‘i’, is the dependent variable which is
regressed on a set of structural characteristics (S), neighborhood
characteristics (N), and environmental water quality
characteristics (E). The natural logarithm of the real property
sale price or the semi-log functional form, has been found to
provide a better fit for hedonic data, which was also the case
for our data set (Palmquist, 1984; Taylor, 2003).7 The regression
model estimated is as follows