Willingness to pay for multiple dimensions of green open space: Applying a spatial hedonic approach

Abstract

AbstractTo optimize land conservation strategies with limited resources, it is necessary to understand people's preferences and willingness to pay (WTP) for green open space. The hedonic pricing method (HPM) is widely used. However, the conventional HPM assumes no value spillovers between neighbouring properties. Here we adopt a spatial regression approach that allows us to relax the no‐spillover assumption. Through an analysis of access to different types, intensity and developability of open green space on house prices in the City of Edmonton, Canada, we illustrate how spatial HPM can be used to quantify direct and spillover values of different dimensions of open green space. We find that WTP for open space has significant spillover effects, ignoring such spillovers would under‐estimate the total value of open space protection and thus the socially optimal amount of land conservation. All else equal, people are willing to pay most for houses that are close to non‐developable green open space and woodlands. The highest price premiums are for woodlands and non‐developable green open space, followed by living near the University of Alberta farm. On the contrary, people need small compensation to live near large commercial farms. The results suggest a NIMBY attitude toward preservation of commercial agriculture.