The Effect of Natural Space on Nearby Property Prices: Accounting for Perceived Attractiveness

Abstract

This paper estimates the effect of attractive natural space on Dutch residential property prices. We operationalize attractive natural spaces by combining land use data with unique data on the perceived attractiveness of natural spaces. In our main results, the effect of attractive natural space on property prices falls from 16.0% for properties within 0.5 km, to 1.6% for properties up to 7 km away. Our findings advance existing hedonic studies by verifying that economic benefits of living near natural space extend over a larger distance. This has important implications for public policy regarding investment in natural space near residential areas. <i>(JEL H41, Q51)</i>