What is a Tree Worth? Green-City Strategies and Housing Prices

30 Pages Posted: 3 Jul 2011

See all articles by Grace Wong Bucchianeri

Grace Wong Bucchianeri

University of Pennsylvania - Real Estate Department

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 2007

Abstract

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

Bucchianeri, Grace Wong and Wachter, Susan M., What is a Tree Worth? Green-City Strategies and Housing Prices (April 1, 2007). Available at SSRN: https://ssrn.com/abstract=1877213 or http://dx.doi.org/10.2139/ssrn.1877213

Grace Wong Bucchianeri (Contact Author)

University of Pennsylvania - Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

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