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Northern Research Station
One Gifford Pinchot Drive
Madison, WI 53726
(608) 231-9318
(608) 231-9544 TTY/TDD

Urban Natural Resources Stewardship

The Value of Urban Tree Cover

[photo:] Tree canopy over a residential street.Research Issue

Tree cover benefits urban communities by, for example, protecting against soil erosion, helping to improve local air quality, and shading and insulating buildings. Urban tree cover also may improve the scenic quality of a city neighborhood, provide privacy, and shield residents from the negative effects of undesirable land uses. However, the economic values of these and other benefits are poorly recognized and are often ignored by landowners and planners.

Our Research

We used hedonic price modeling to estimate how tree cover affects property values in urban Dakota and Ramsey Counties in Minnesota. In hedonic price modeling, the item being studied is broken up into different components and the value of each separate component is estimated. In this case, the components of property value are structural, neighborhood, and environmental factors, including tree cover.

We measured percent tree cover on land parcels and within 100, 250, 500, 750, and 1000 meters. Structural variables considered in the model include lot size, sale price, house square footage, and age of the house.  Neighborhood variables included distance to a busy road, average test scores for local elementary and middle school students, and distance to a shopping center.  Environmental variables besides tree cover included distance to a lake, a park, and a trail.  The model also considered the month of the year that the house was sold and the school district in which it was located.

We ran two different models and our results show that local tree cover is valued by the purchasers of residential single-family properties in urban areas. Specifically, the results indicate that higher percentages of tree cover within 100 meters and 250 meters of a parcel increase house sale price.

In Model 1, a 10 percent increase in tree cover within 100 meters of the propoerty increased its sale price by an average of $1371.  A 10 percent increase in tree cover within 250 meters increased the sale price by $836. In Model 2, houses with up to 44 percent tree cover within 100 meters and up to 60 percent tree cover within 250 meters had higher sale values.

Tree cover on the parcel itself increased house sale price in Model 1, but the effect was not statistically significant. In Model 2, parcel level tree cover under 20 percent had a negative impact on sale price and tree cover over 20 percent had a positive impact on sale price.

In sum, homeowners valued trees in their local neighborhoods at distances that roughly correspond to the length of a city block. This may reflect a preference for tree-lined streets and the shading and aesthetic environment they offer. Home owners appear to place less value on tree cover beyond their immediate local neighborhood and on tree cover over 40 percent in their immediate neighborhood.

Research Results

Sander, Heather A.; Haight, Robert G. 2012. Estimating the economic value of cultural ecosystem services in an urbanizing area using hedonic pricing. Journal of Environmental Management. 113: 194-205.

Sander, Heather; Polasky, Stephen; Haight, Robert. The value of urban tree cover: A hedonic property price model in Ramsey and Dakota Counties, Minnesota, USA. Ecological Economics 69(8): 1646-1656.

Research Participants

Principal Investigator

  • Heather Sander, Conservation Biology Program, University of Minnesota, St. Paul

Research Partners

  • Stephen Polasky, Department of Applied Economics, University of Minnesota, St. Paul
  • Robert G. Haight, Research Forester, U.S. Forest Service, Northern Research Station

Last Modified: 03/08/2013