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

Susan M. Wachter () and Grace Wong

Real Estate Economics, 2008, vol. 36, issue 2, pages 213-239

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. Copyright 2008 American Real Estate and Urban Economics Association

Date: 2008

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