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Environment and Society

The Berkeley Institute of the Environment (BIE) is a university-wide initiative for expanding and coordinating University of California, Berkeley interdisciplinary research and educational activities in environmental scholarship. The goals of BIE are:

  • Research - To create the best possible environment for faculty and students interested in the relationship of climate change to a sustainable society to launch interdisciplinary research.
  • Scholarship - To train tomorrow's environmental citizens, leaders, and scholars by greening the UC Berkeley curriculum through added specializations and designated emphases on climate change and societal transformation.
  • Partnership - To deepen and expand our collaborations with governments, National Labs, and industry at all scales to help build a resilient global economic system that can mitigate climate change and forge a sustainable society.

BIE projects are organized around three interconnected themes:

  1. Sustainable Communities - building environmental resilience at the local scales
  2. Environment and Society - understanding environmental function at regional scales
  3. Energy and Climate Change - evolving a carbon-free society at global scales
Cover page of Urban Nature Centers and House Prices in Chicago

Urban Nature Centers and House Prices in Chicago

(2007)

In 1994, the City of Chicago’s Department of Environment made a significant investment to improve the North Park Village Nature Center, one of the City’s few accessible natural sites located on the Chicago’s north side. A previous on-site travel-cost survey of visitors to the North Park Village Nature Center (McGrath, 2006) showed that, on average, this nature center generates significant annual consumer surplus (the recreational use value) to users of the nature center – about $1,500 per user per year, or nearly $322 per visit. These welfare estimates imply the net present value of the sites recreational value to be on the order of $100 million in 2005 dollars, or about $2.1 million per acre.

A survey that is limited to users of the center understates the benefits of the investment by neglecting to take into account the benefits enjoyed by neighbors who value the existence of the center without directly using it (the non-use value). Thus, an important question that has not been addressed is whether this investment by the City of Chicago and the possible use and non-use values have been capitalized into property values near the nature center. The City’s investment in improving the North Park Village Nature Center may have increased property values because recreational users of the site – who are likely to live nearby – clearly place a high amenity value that these kinds of centers provide.

The objective of this study is to evaluate the effects of proximity to the nature center on nearby residential property values and the subsequent impact in property tax revenue to Cook County. Using both a standard hedonic approach as well as a repeat-sales estimation approach, we estimate a house price index as a function of time and distance from the nature centers. We use the results to estimate (1) the revealed total willingness to pay (use and non-use value) of the nature center as of 2003 and (2) the increase in Cook County property taxes generated by the presence and 1994 upgrade of the nature. This exercise allows us to determine whether the additional tax revenue might actually allow the City of Chicago cover its own costs in redeveloping compromised areas as accessible natural areas.

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