The Impact of Natural Conservations on Nearby Land Prices: Evidence from New National Park Establishments in China

Abstract

We quantitatively assess the economic impacts of national park establishment on nearby land prices in China based on micro-level data over two decades. We observe an overall 23.3% increase in land prices after a national park is established. The re- sults remain robust when we employ an instrumental variable regression approach. Land transactions for industrial use, normalized difference vegetation index (NDVI) change, PM2.5 concentrations, and vitality to the local employment market are the main drivers of the price premium. The positive impacts on land prices originate from lower-grade land, land sold by auctions, existing construction land, residential land, land transactions close to biological species reserves, and areas without centralized winter heating. Our research provides novel empirical evidence of the positive economic spillover of the newly established national park system in China.

Keywords: National parks, Land price changes, Protected Areas, Environmental conservation