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What Is a Tree Worth? Green‐City Strategies, Signaling and Housing Prices

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  • Susan M. Wachter
  • Grace Wong

Abstract

We investigate the correlation between curbside tree plantings and housing price movements in Philadelphia from 1998 to 2003, comparing two programs, one by the Philadelphia Horticultural Society (PHS) that requires block‐group effort that focuses on low‐income neighborhoods and the other by the Fairmount Park Commission that is individual‐based without specific target areas. A 7 to 11% price differential is identified within 4,000 feet of the Fairmount tree plantings. We argue that this is largely driven by either social capital creation or a signaling mechanism, on top of an intrinsic tree value (around 2%). 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.

Suggested Citation

  • Susan M. Wachter & Grace Wong, 2008. "What Is a Tree Worth? Green‐City Strategies, Signaling and Housing Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(2), pages 213-239, June.
    • Handle: RePEc:bla:reesec:v:36:y:2008:i:2:p:213-239
    DOI: 10.1111/j.1540-6229.2008.00212.x
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    Cited by:

    1. Alba Miñano-Mañero, 2024. "When are D-graded neighborhoods not degraded? Greening the legacy of redlining," Working Papers REM 2024/0353, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    2. Kevin C. H. Chiang & Gregory J. Wachtel & Xiyu Zhou, 2019. "Corporate Social Responsibility and Growth Opportunity: The Case of Real Estate Investment Trusts," Journal of Business Ethics, Springer, vol. 155(2), pages 463-478, March.
    3. Xiaolong Liu & Weidong Qu, 2015. "Winner's Curse or Signaling? Bidding Outcomes in the Chinese Land Market," International Real Estate Review, Global Social Science Institute, vol. 18(1), pages 113-129.
    4. Youngme Seo, 2020. "Varying Effects of Urban Tree Canopies on Residential Property Values across Neighborhoods," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    5. Julia Freybote & Yiping Fang & Matthew Gebhardt, 2017. "The impact of temporary uses on property prices: the example of food trucks," Journal of Property Research, Taylor & Francis Journals, vol. 34(1), pages 19-35, January.
    6. Szczepańska Agnieszka & Krzywnicka Iwona & Lemański Grzegorz, 2016. "Urban Greenery as a Component of Real Estate Value," Real Estate Management and Valuation, Sciendo, vol. 24(4), pages 79-87, December.
    7. Charlotte Glennie, 2020. "Growing Together: Community Coalescence and the Social Dimensions of Urban Sustainability," Sustainability, MDPI, vol. 12(22), pages 1-25, November.
    8. Julia Freybote & Hua Sun & Xi Yang, 2015. "The Impact of LEED Neighborhood Certification on Condo Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(3), pages 586-608, September.
    9. Richard R. Shaker & Joseph Aversa & Victoria Papp & Bryant M. Serre & Brian R. Mackay, 2020. "Showcasing Relationships between Neighborhood Design and Wellbeing Toronto Indicators," Sustainability, MDPI, vol. 12(3), pages 1-24, January.

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