Eliciting preferences for urban parks

The hedonic pricing method has been used extensively to obtain implicit prices for availability of urban green space, but few have obtained households' preference parameters. We elicit preferences and estimate willingness to pay functions for park availability in Copenhagen using an approach that places identifying restrictions on the utility function. We do this for two different measures of park availability and examine sources of preference heterogeneity. We find that the implicit price of another hectare of park within a 1000 m radius is 53.25 EUR per ha per year for the average apartment corresponding to an increase in annual rent of 0.33% per additional ha. For reducing distance to the nearest park by a meter, the price is 0.59 EUR per meter per year, corresponding to an increase in annual rent of 0.03‰ per meter. We apply our results to a policy scenario reducing the park area available in an area of central Copenhagen and show how estimates of aggregate welfare changes are highly sensitive to the measure of park availability applied. The findings stress the importance of paying attention to how public goods are defined when undertaking welfare economic policy analyses.