The amenity value of the urban forest: an application of the hedonic pricing method

The majority of urban forest benefits represent non-consumptive use values, which include benefits derived from pleasant landscape, clean air, peace and quiet and screening, as well as recreational activities. The hedonic pricing method examines external benefits and costs of urban forests associated with housing. This investigation studied whether and how urban forest benefits are capitalized in property prices. It also searches for suitable variables for describing the green space benefits in hedonic pricing studies. Apartment sales data (1006 apartments) were collected in Joensuu, a town of 48000 inhabitants in North Carelia, Finland. Hedonic models were designed to explain purchase prices. Apartment characteristics, location, and environmental quality variables were used as explanatory variables in the models. Environmental and locality data were measured with respect to each specific house. Results indicate that urban forests are an appreciated environmental characteristic and that their benefits are reflected in the property prices Proximity of watercourses and wooded recreation areas as well as increasing proportion of total forested area in the housing district had a positive influence on apartment price. However, the effect of small forest parks was not clear. The range of the variable values was small, because there were many small wooded green spaces in the study locale. In addition, data concerning the views from the apartment or the composition of the forests was not available.