Revealing preferences for urban biodiversity as an environmental good

Abstract

Biodiversity is essential for human well-being, but little is known about urban dwellers’ preferences and willingness to pay (WTP) for urban biodiversity. Since a large share of the global population concentrates in cities, urban areas are a critical space where humans and nature interact and biodiversity-related preferences are formed. This study investigates urban dwellers’ WTP for biodiversity using a revealed-preference approach on a real estate dataset of approximately 140,000 unique entries of rental and sales transactions of apartments. Three biodiversity indicators were used to investigate heterogeneous preferences for biodiversity as an environmental good. The findings indicate that WTP for biodiversity is positive and economically significant. This implies that urban biodiversity conservation and enhancement can result in co-benefits for the local urban population. Moreover, this study identifies a satellite-based biodiversity indicator as a potential alternative to conventional species richness indicators. This finding is significant for benefit transfer studies and primary biodiversity valuation in regions with limited data availability. The results can inform biodiversity conservation and management decisions by highlighting the importance of incorporating urban biodiversity in biodiversity policies.