Wednesday, May 10, 2023

The Value of Scattered Greenery in Urban Areas: A Hedonic Analysis in Japan

This study investigates the impact of scattered greenery (street trees and yard bushes), rather than cohesive greenery (parks and forests), on housing prices. The authors identify urban green space from high-resolution satellite images and combine these data with data on both condominium sales and rentals to estimate hedonic pricing models. They find that scattered urban greenery within 100 meters significantly increases housing prices, while more distant scattered greenery does not. Scattered greenery is highly valued near highways, and the prices of inexpensive and small for-sale and for-rent properties are less affected by scattered greenery. These results indicate that there is significant heterogeneity in urban greenery preferences by property characteristics and location. This heterogeneity in preferences for greenery could lead to environmental gentrification since the number of more expensive properties increases in areas with more green amenities.
Their results show that a 10% increase in scattered greenery within 100 m increases the price of apartments for sale by approximately 2 to 2.5% (from 740,000 to 930,000 JPY) when evaluated at average housing prices. 

Sander et al. (2010), who analyzed green space in Minnesota, reported that a 10% increase in the tree canopy within 100 m increased the average housing price by 0.48% and that the average tree canopy within 250 m increased the average price by 0.29%. Their estimated impact, which is larger than those in previous works, could be caused by the characteristics of the study area. Their study area has little green space, so the value of greenery could be high (Brander and Koetse 2011; Siriwardena et al. 2016). Additionally, trees and grasses that reduce noise and pollution might be highly valued due to the high population density and traffic in their study area (Perino et al. 2014; Votsis 2017). The authos provide a subsample analysis in the following sections and address the mechanisms underlying the results of these green assessments.

by Yuta Kuroda & Takeru Sugasawa
Environmental and Resource Economics  via Springerlink
Volume 85, Pages523–586 (2023)

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