The Costs and Benefits of Providing Open Space in Cities

Tinbergen Institute Discussion Paper No. 2008-001/3

33 Pages Posted: 18 Jan 2008

See all articles by Jan Rouwendal

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Willemijn van Der Straaten

VU University - Department of Spatial Economics; CPB Netherlands Bureau of Economic Policy Analysis

Date Written: January 2008

Abstract

Although many researchers have investigated the value of open space in cities, few of them have compared them to the costs of providing this amenity. In this paper, we use the monocentric model of a city to derive a simple cost-benefit rule for the optimal provision of open space. The rule is essentially the Samuelson-condition for the optimal provision of a public good, with the price of land as the appropriate indicator for its cost. The condition is made operational by computing the willingness to pay for public and private space on the basis of empirical hedonic price functions for three Dutch cities. The conclusions with respect to the optimal provision of open space differ between the three cities. Further investigation reveals that willingness to pay for parks and public gardens increases with income, although not as fast as that for private residential space.

Keywords: spatial planning, provision of public goods, cost-benefit analysis

JEL Classification: R52, H41, D61

Suggested Citation

Rouwendal, Jan and van Der Straaten, Willemijn, The Costs and Benefits of Providing Open Space in Cities (January 2008). Tinbergen Institute Discussion Paper No. 2008-001/3, Available at SSRN: https://ssrn.com/abstract=1085202 or http://dx.doi.org/10.2139/ssrn.1085202

Jan Rouwendal (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Willemijn Van Der Straaten

VU University - Department of Spatial Economics ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

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