Journal of Real Estate Finance and Economics, 19:2, 113–131 (1999) # 1999 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands. A Housing Price Model with Endogenous Externality Location: A Study of Mobile Home Parks HENRY J. MUNNEKE Associate Professor of Real Estate, 206 Brooks Hall, Terry College of Business, University of Georgia, Athens, GA 30602-6255, E-mail: hmunneke@terry.uga.edu V. CARLOS SLAWSON, JR. Assistant Professor of Real Estate, 2164 ACEBA, E.J. Ourso College of Business, Louisiana State University, Baton Rouge, LA 70803 Abstract This research explores the impact of mobile home parks on the value of single-family homes. This is the first study that empirically analyzes the effect of mobile home parks on property values. The empirical methodology used attempts to address the potential identification problem that exists within this study; it is possible that mobile home parks are located in areas of relatively lower land values or next to other land uses that impact property values. To address this identification problem, mobile home park locations are treated as endogenous within the model and the mobile home parks are identified as being located in residential or non-residential areas. The results suggest a negative effect on the selling price of single-family dwellings in close proximity to mobile home parks located in residential areas. Key Words: externalities, housing values, mobile home parks, location. The study of the effects of externalities, both positive and negative, on the value of single- family dwellings is well documented. The study of non-conforming uses covers a wide range of topics, from the negative effect of air pollution (Nourse, 1970; Nelson, 1978; and Harrison and Rubinfeld, 1978), to crime (Buck et al., 1991 and Hellman and Narroff, 1979) and zoning (Jud, 1980). However, many studies deal with property issues that are less macro than those previously mentioned. These studies tend to look at non-conforming uses on a ‘‘micro’’ level, such as the impact of churches (Quang Do et al., 1994), golf courses (Quang Do et al., 1995), traffic (Hughes and Sirmans, 1992), shopping centers (Colwell et al., 1985), and high rise office buildings (Thibodeau, 1990). A study by Wang et al. (1991) extended the study of externalities to a single land use classification. Their study looks at the impact of residential rental properties on the value of single-family dwellings. The current study examines the impact of mobile home parks 1 on the value of single-family dwellings in East Baton Rouge Parish, Louisiana. The market for mobile homes makes up a significant portion of the new home market in the U.S. During 1995, more than one out of every three new homes (comprised of single- family dwellings and mobile homes) built or placed in the U.S. was a mobile home. 2 Numerous zoning ordinance disputes and court cases involving mobile homes, or