A hedonic analysis of the demand for and benefits of urban recreation parks

Abstract

Increasing population and urbanization in U.S. cities is not only contributing to the congestion in urban recreation parks but also is likely to exceed the capacity of these parks’ recreational and amenity benefits. In order to estimate the demand for and benefit of parks, we employed a typical hedonic model, which confirmed that the urban recreation park acres increase nearby property values. Two Step Clustering, which is capable of defining the optimum number of submarkets based on the data, was employed to define the submarkets within Roanoke, Virginia and to obtain enough implicit price points to further estimate the demand for urban park acres in the second stage. Results from the second stage hedonic estimation revealed that demand for urban park acres was inelastic in price and income; and the size of the park was a substitute for living space and proximity to park. In addition, increasing the average size of parks by 20% from the current level increased the per household consumer surplus by $160. The estimated amenity benefits of urban recreation parks will be useful in urban landuse planning and open space preservation.