Environmental amenities of urban rivers and residential property values: A global meta-analysis

Abstract

Environmental amenities and disamenities of urban rivers and their capitalization in property prices have been a major subject of empirical investigation in the hedonic price method (HPM) literature for several decades. Primary studies across the globe have nonetheless adopted varying valuation scenarios and modelling approaches. And systematic variation has been shown in homeowners' marginal willingness-to-pay (WTP) for urban rivers' amenities and disamenities, ranging between −12.2% and 63.58% price premium. To identify which valuation scenarios, socio-economic variables, and modelling characteristics might affect the quantification of urban rivers' impacts on property values, we conducted a very first meta-analysis of existing evidence to extract additional information concerning the heterogeneity in WTP estimates pertaining to urban rivers' environmental amenities and disamenities. A total of 53 observations from 30 primary studies that adopted HPM to provide WTP estimates for three prominent valuation scenarios, i.e., proximity, view and water quality, were synthesized using a random effects model. Our meta-analysis results revealed several important factors in explaining the heterogeneity in empirical WTP estimates pertaining to urban rivers' environmental amenities/disamenities. First, while all three valuation scenarios could capture urban rivers' impacts on residential property values, river view was associated with the greatest premium, followed by river water quality, and river proximity the least. Second, we found that WTP estimates were significantly higher after the year of 2000, indicating the widespread and successful river restoration and rehabilitation projects in the 21st century has driven up homeowners' environmental perception and appreciation of urban rivers' amenities, especially their clear depreciation of negative environmental disamenities, to a high level. Third, our results showed that homeowners' valuation of urban rivers was not sensitive to the macro-geographical locations of their residences, suggesting a universal overall appreciation/depreciation of urban rivers across varying cultures and societies. Instead, household income level and population density should be systematically controlled if value transfer across countries is necessary. The findings of this meta-analysis could help refine urban rivers' attributes to be incorporated into HPM studies so as to adequately quantify people's sophisticated valuation of intertwined amenities and disamenities. On the practical front, our results supported two arguments from a very utilitarian point of view. First, it appears that the visual impacts might be prioritized for river restoration projects, such as through careful revegetation of riparian areas using native species. This could harbor rich diversity of ecological functions and in the meantime maximize environmental amenities that homeowners would like to pay for. And second, cost-effective river restoration in urbanized contexts should be prioritized in densely populated areas over places with relatively low population densities. This approach might maximize the number of people who can enjoy rivers for a given budget. © 2019 Elsevier B.V.