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Open AccessArticle

Willingness to Pay for Green Infrastructure in Residential Development—A Consumer Perspective

Department for Real Estate and Construction Management, KTH Royal Institute of Technology, SE-100-44 Stockholm, Sweden
School of Built Environment, The University of Technology Sydney, Ultimo NSW 2007, Australia
Department of Marketing and Strategy, Stockholm School of Economics, SE-113 83 Stockholm, Sweden
Author to whom correspondence should be addressed.
Atmosphere 2020, 11(2), 152;
Received: 17 January 2020 / Revised: 23 January 2020 / Accepted: 26 January 2020 / Published: 30 January 2020
(This article belongs to the Special Issue Infrastructure Planning for Urban Climate Moderation)
This paper investigates the literature and theoretical underpinning of the concept of “willingness to pay” (WTP) for green infrastructure (GI) with consequences for residential development. The benefits of GI in urban settlements include improved air quality, attenuation of the urban heat island, thermal insulation and lower energy bills for green roofs and walls, the creation of social amenity space, a habitat for biodiversity, and stormwater water attenuation. Collectively, these benefits are termed eco-system services and enhance sustainability. The role of GI, the “lungs of the planet”, is heavily correlated to atmospheric conditions; high levels of GI improve air quality, which is acknowledged widely with many cities increasing GI to make them more resilient to future predicted challenges with respect to heat and poor air quality. In addition, there is evidence that the biophilia effect enhances human well-being. There are some studies claiming that purchasers pay a premium for property with good GI. However, there is little research about the process in consumers’ minds leading to such a premium—if, how, when (under what circumstances), and then to what extent are consumers willing to pay for GI. This process, if better understood, may enable sellers or policy makers to influence the amounts of GI in developments, thus making it possible to enhance the value of GI to buyers. There is some research pointing to factors to be considered when modeling such processes. For developers, knowing the optimum amount of GI would enable them to design and construct developments with maximum purchaser appeal. To do this, stakeholders need to predict the level of WTP amongst potential purchasers for which they need to understand the decision processes behind WTP. In this way, sustainability in residential property development could be optimized. The paper analyzes the literature and theories concerning WTP, focusing on dwellings and GI. Our findings are that some quantitative evidence exists that purchasers pay more for residential property with high levels of GI in some cities, but they do so without any understanding of the possible decision processes leading to those premiums (if, how, when, and then to what extent). The paper proposes a comprehensive conceptual model that may explain buyers’ WTP for a dwelling based on a presumed cost–benefit analysis performed by buyers, which has been extended here to include GI and psychological factors. Thus, the paper has a consumer perspective. The model may be used to select variables and test them in empirical studies, and by integrating with other factors in the model, it can attain a more comprehensive understanding of WTP for GI in residential development.
Keywords: willingness to pay; ecosystem services; green infrastructure; residential development willingness to pay; ecosystem services; green infrastructure; residential development
MDPI and ACS Style

Zalejska-Jonsson, A.; Wilkinson, S.J.; Wahlund, R. Willingness to Pay for Green Infrastructure in Residential Development—A Consumer Perspective. Atmosphere 2020, 11, 152.

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