As urbanization advances and the majority of the population becomes concentrated in cities, the demand for recreational and open spaces continues to grow. In major urban centers, including the Seoul Metropolitan Area and the five major metropolitan ci...
As urbanization advances and the majority of the population becomes concentrated in cities, the demand for recreational and open spaces continues to grow. In major urban centers, including the Seoul Metropolitan Area and the five major metropolitan cities, the problem of overpopulation is particularly acute. Urban green spaces are increasingly recognized as crucial infrastructure, offering diverse environmental, social, and economic benefits that help mitigate the negative consequences of urbanization. Nevertheless, the supply of green space is increasingly constrained by factors such as accelerated urbanization, high land prices, and the sunset provision for long-term unexecuted urban parks. Accordingly, empirically identifying the impact of increased green space on the quality of life and well-being of urban residents has emerged as a critical policy challenge.
This study assessed the economic value of urban green space—including parks, forests, and grasslands, all non-market assets—by incorporating heterogeneity in preferences across household characteristics. Both the hedonic price model (HPM) and a discrete location choice model (LCM) were applied in parallel. The analysis examined differences in green space preferences by household type, using quantitative green space indicators (such as the area ratio of parks within walking distance, the area ratio of forests and urban natural parks, and the green space ratio based on land cover maps), and factored in key household characteristics, including family composition, income, residential area, and metropolitan residency.
Three hypotheses were empirically tested: (1) the welfare effects of increasing the green space area ratio, (2) differences in preferences for green space types based on accessibility, and (3) heterogeneity in preferences according to household characteristics, with particular attention to how marginal and non-marginal improvements in regional green space affect both mean and subgroup welfare. Estimation results robustly supported the first hypothesis in most regions and for most green space types, though some exceptions were observed (e.g., negative effects of forests and urban nature parks in Gwangju). The second hypothesis was also statistically validated, with significantly higher preferences for highly accessible green spaces observed across all regions. The third hypothesis of preference heterogeneity by household characteristics was likewise empirically confirmed.
The hedonic price model analysis, based on apartment transaction data from eight major cities (including the Seoul Metropolitan Area and the five metropolitan cities in the Republic of Korea) from 2015 to 2022, assessed how the area ratios of parks within walking distance and those of forests and urban nature parks affected housing prices and compared the impacts of these green space types. The effects of green space were evaluated while controlling for housing attributes, accessibility to education, transportation and healthcare, and spatiotemporal trends. Marginal willingness-to-pay (MWTP) functions reflecting key household characteristics were estimated using a multi-market strategy and bootstrapping, providing a foundation for measuring welfare effects of non-marginal green space changes. Results indicated that MWTP for a 1%p (percentage point) increase in green space ranged from approximately KRW 0.9 million to 24.65 million for parks within walking distance, and from KRW 1.31 million to 2.09 million for forests and urban nature parks, varying substantially by region and green space type. In all eight regions, parks within walking distance yielded significantly higher benefits than less accessible green space types. MWTP also varied across household composition, increasing as the number of household members aged 19 or younger rose and decreasing as those aged 20 to 64 rose; it also increased with higher income and larger living area. Application of a green space policy scenario (1.34%p increase in parks within walking distance and 2.64%p increase in forests and urban nature parks) resulted in household-level welfare effects ranging from KRW 9.43 million to 18.57 million for parks within walking distance and from KRW 1.93 million to 4.09 million for forests and urban nature parks, with substantial disparities in benefit depending on Seoul Metropolitan Area residency and family composition.
In the discrete location choice model analysis, the focus was on the impact of the green space ratio (forests and grasslands, as measured by land cover) on locational utility, using apartment transaction data from Seoul for 2022–2023. The utility function included not only locational characteristics, such as housing costs, accessibility to education and healthcare, and crime safety grade, but also major household characteristics, incorporated as interaction terms to capture preference heterogeneity systematically. Housing prices were standardized (via price equation estimates), and an instrumental variable approach addressed price endogeneity. The welfare estimation also included housing price feedback due to green space increases, enabling a more holistic welfare analysis. Results confirmed preference heterogeneity for regional characteristics, including green space, depending on household type. Preferences for green space were greater in households with more members aged 19 or younger and those aged 65 or older, as well as in smaller living spaces. Accounting for housing price effects, the annual per-household welfare effect of a 1%p green space increase ranged from –KRW 4.35 million to KRW 17.7 million; for the policy scenario (2.64%p expansion), the effect ranged from –KRW 11.5 million to KRW 46.73 million. These annual welfare effects indicate that both average welfare gains and disparities across households are greater than those predicted by the hedonic price model.
By employing both hedonic price and discrete location choice model, this study provides a comprehensive empirical analysis of the average welfare effects of various urban green spaces and preference differences by household characteristics. Although the two models differ in theoretical background, variable operationalization, and subject, their complementary application offers substantial value for multi-dimensional welfare evaluation of increased urban green space from multiple perspectives. Furthermore, this research establishes a basis for the environmental valuation of urban green space that accounts for its accessibility and beneficiary characteristics, supporting consensus-building to enhance public support for green space policy and underscoring the need for beneficiary-oriented policy design. Future research should address limitations by controlling for spatial autocorrelation, employing GIS-based micro-analyses, and considering general equilibrium effects, thereby enabling more sophisticated and comprehensive urban green space evaluation and policy development.