Abstract
In this study, the relationship between environmental quality level and housing sale prices is examined in the Istanbul Metropolitan Area (IMA). Examination is carried out in two steps. Firstly, the environmental quality index is developed by utilizing principal component analysis. The geographical scope of the index is 32 districts within boundaries of the IMA. The index is achieved related to subjective and objective indicators. It is seen that natural advantages, dissatisfactions based on high density, and some negative externalities resulted from industrial areas have impacts on the environmental quality index levels. Secondly, the relationship between the index levels and housing sale prices is explored. For this reason, correlation coefficient and chi-square goodness-of-fit tests are utilized. Results provide enough evidence that there is a positive and strong linear relationship between the environmental quality and housing sale prices at the district level in the IMA; the index levels and housing sale prices are dependent ranks.
