What is a Tree Worth? Green-City Strategies and Housing Prices
30 Pages Posted: 3 Jul 2011
Date Written: April 1, 2007
We investigate the correlation between curb-side tree plantings and housing price movements in Philadelphia from 1998 to 2003, comparing two programs, one by the Philadelphia Horticultural Society that requires block-group effort that focuses on low-income neighbourhoods and the other by the Fairmount Park Commission that is individual-based without specific target areas. A 7 to 11 percent price differential is identified within 4000ft of the Fairmount tree plantings. We argue that this is largely driven by either social capital creation or a signaling mechanism, on the top of an intrinsic tree value (around 2 percent). Findings using the PHS tree program suggest that development of social capital or environmentally-conscious behavior might be a less important channel. Any positive changes brought by the PHS tree plantings were not detected with sufficient statistical power.
Keywords: Housing price, Social capital, Signaling, Tree planting
JEL Classification: R21, R31
Suggested Citation: Suggested Citation