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A Welfare Evaluation of Green Urban Areas

Author

Listed:
  • Pierre M. Picard

    (Department of Economics and Management, Université du Luxembourg)

  • Thi Thu Huyen Tran

    (Department of Finance, Université du Luxembourg)

Abstract

(To consult this DP, please send an e-mail to dem@uni.lu) Urban green areas cover more than 6% of urban land in Europe. This paper quanti- fies the impact of urban green areas on city structures for more than 300 European cities. It discusses the economic effects of the local amenity produced by green urban areas using an urban economics model with various set of preferences. It estimates those models using data on detailed residential land uses, green urban areas and population density. It finally assesses the economic effects of reducing urban green areas in counterfactual exercises where cities are closed and open to migration and green urban land is converted to residential plots or not. By this strategy, the economic assessment accounts for the general equilibrium effects through endogenous land prices and residential space and location choices. It shows that the gross benefits of urban green areas are substantial. A uniform removal of half of the urban green areas is equivalent to 6-9% reduction of household annual income. However, the conversion of those areas to residential plots brings a net gain of approximately 4%.

Suggested Citation

  • Pierre M. Picard & Thi Thu Huyen Tran, 2020. "A Welfare Evaluation of Green Urban Areas," DEM Discussion Paper Series 20-21, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:20-21
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    References listed on IDEAS

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    More about this item

    Keywords

    Urban green areas; urban spatial structure; land use policy; amenities; optimal locations; public facilities; structural estimation.;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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