Size Matters...

In this paper, valuation of urban parks is researched. Urban parks serve a mainly recreative function, so one could posit that geographical proximity of parks and park size influence the appreciation of these urban parks. Additionally, a synergetic effect of proximity and size on urban park valuation has been researched. Findings indicate that geographical proximity indeed influences the valuation of urban parks: Residents value urban parks more positively when geographical proximity is high than when it is low. Secondly, partial evidence has been found for the claim that park size positively influences the appreciation of urban parks. Additionally, indication of the existence of a synergetic effect of both distance and size has been found, in one case. A distance effect on transaction prices has been demonstrated: in both The Hague and Utrecht transaction prices are higher for residences closer to urban parks. In Utrecht, a park size effect has been found as well: when the nearest urban park is larger, transaction prices are higher. In Utrecht, a synergetic effect has been found too. Two explanations of the synergetic effect are possible: (1) as distance to urban parks increases, the park size effect on transaction prices decreases and (2) as the size of an urban park increases, the distance effect on transaction prices increases. Data of transaction prices and urban parks from the period 2004-2006 in The Hague and Utrecht is used, obtained from the Dutch Association of Realtors and Appraisers (NVM). In this research the Hedonic Pricing Method is used. With this method the implicit price of housing characteristics can be estimated: a housing price is the price of a bundled good. Hedonic Pricing can estimate the level of contribution of all housing characteristics included in the model, in the transaction price. Because proximity and size of the nearest urban park are also housing characteristics that can be added to the model, it is desirable to use proxies to estimate proximity to the nearest urban park and the associated size. Hence, also the premium residents are willing to pay to live near an urban park can be estimated. People derive utility from urban parks using four different mechanisms. Firstly, direct utility from visiting the park and ‘consuming’ this amenity is used. Secondly, people derive utility from the possibility to visit an urban park, a more indirect mechanism. Thirdly, earlier research shows that residents derive utility from a pleasant view on green spaces. Lastly, neighborhoods can be more attractive for their ‘green image’. Urban parks can contribute positively to this image. Research on the valuation of urban parks has been done before. Proximity as well as size can have a positive impact on the valuation of urban park, although results are not always unambiguous. This research contributes to literature, because the interaction between park size and proximity and their effect on the valuation of urban parks in urban areas in the Netherlands has not been demonstrated yet. From a societal perspective, urban planners can use insights of this research in urban planning regarding the creation and/or conservation of urban green space: are various smaller urban parks or a small amount of large parks appreciated more by residents? In order to increase the perceived quality of living in cities, acting in line with the results of this study should increase neighborhood attractiveness, at least in the researched cities. Assuming that urban parks create value for residents through these mechanisms, one could expect that residents value these parks more positively when they live closer to urban parks and/or when the nearest urban park has a bigger geographical size. A possible manner to measure this valuation of urban parks objectively, is looking at residential transaction prices, housing prices, in relation to their distance to the nearest park and the associated size of that park.