Economic value of hackney downs park

Measuring the value of a neighbourhood park: A hedonic analysis in London
by Claudia Meier claudia.meier@student.unisg.ch

Submitted to the Department of Economics in Partial Fulfillment of the Requirements for the Degree of Bachelor of Arts at the University of St.Gallen

February 21st, 2011

Advisor: Prof. Dr. Francesco Audrino

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INTRODUCTION LITERATURE REVIEW

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2.1Discussion of recent literature measuring the value of parks 2.2 Conclusion

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METHOD

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3.1 Conclusion

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THE SURVEY

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4.1 The Questionnaire structure 4.2 The chosen approach 4.3 Data Collection 4.4 Representativeness of the Data 4.5 Conclusion

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DESCRIPTION OF THE DATA

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5.1 Structural attributes 5.2 Hackney Downs Park valuation 5.3Conclusion

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THE HEDONIC PRICE MODEL

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6.1 Model specification 6.1.1 Explanatory variable of interest 6.1.2 Explanatory variables to hold fixed 6.1.3 Determination of Functional Form 6.2 Results for dataset1 6.2.1 Park proximity (vegetation) 6.2.2 Transport Links 6.2.3 Size 6.2.4 Historic value 6.2.5 Proximity to estates 6.3 Results for dataset26.4 Conclusion

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CONCLUSION REFERENCES

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Abstract The study at hand investigates whether residents of Hackney Downs Ward are willing to pay for proximity to Hackney Downs Park. The expectation is, that property values increase as park distance decreases. The relationship between property values and park proximity is estimated by hedonic analysis. Furthermore, qualitative data isgathered to check the plausibility of the results found by means of hedonic analysis. Results obtained by hedonic analysis suggest, that Hackney Downs Park has a positive non-linear effect on property values within a walking distance of approximately 6 to 7 minutes from the park. The analysis of the qualitative data suggests that the park does have a value for people of Hackney Downs Ward livingwithin a walking distance of approximately 4 to 5 minutes from the park. Qualitative data further suggests that Hackney Downs Park is a desirable park but that its value can be enhanced by increasing park variability and safety.

1 Introduction
Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength to body and soul. I only went out for awalk, and finally concluded to stay out till sundown, for going out, I found, was really going in. John Muir; 1838 – 1914 Nature is of great importance for the well being of human kind. The more alarming is the limited amount of green open space left in big cities, where most people live. Not to mention the sheer absence of truly wild places not only in cities but whole countries (Macfarlane,2007). The source of this problem lies in the economic nature of green open space. According to economic theory a natural place can be defined as a common or a public good, depending on whether it is rival or not. Either way, from an economic perspective natural places are goods that are not excludable, that is people cannot be prevented from using them, and therefore the private market doesn’tsupply them. Hence, natural places don’t have a market price attached to them, although they are of value. In a market economy, it is therefore the government who has to provide or save natural places. This is not free of charge of course. For instance, the cost from saving a nature reserve is the economic benefits that would arise from using it to build new homes. In the case of an urban park, costsare substantially higher due to elevated urban land values and additional design-, building- and maintenance costs. Thus, before the government actually provides an urban park or saves a natural space, it has to compare the total benefits of all those who would use it to the costs of building and maintaining it. Whereas the costs can be estimated in a relative accurate and verifiable way, the...