1. THE ECONOMIC VALUE OF
PROTECTED OPEN SPACE IN
SOUTHEASTERN PENNSYLVANIA
Greenspace Alliance / DVRPC
April 20, 2010
Econsult Corporation

2. Economic Value Components
• Job and revenue generation
• Environmental services provided
• Direct use benefits
• Property value impact
• Status
– Research, modeling complete
– Fine-tuning results and visuals
– Deciding how conservative to be
– Accounting for potential overlaps within/between categories
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3. Status of Engagement
• Research, modeling complete
• Fine-tuning results and visuals
• Deciding how conservative to be
• Accounting for potential overlaps within/between categories
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4. Economic Value Components
• Job and revenue generation
• Environmental services provided
• Direct use benefits
• Property value impact
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5. Job and Revenue Generation
• Accounting for economic impacts
• Categories
– Privately controlled open space
– Publicly controlled open space
– Tourism activity
– Aggregate impact
• Context and commentary
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6. Accounting for Economic Impacts
• Typical discussion: dollar terms vs. non-dollar terms
• Development = net new revenues AND net new expenditures
• Economic activity from open space > 0
– Privately controlled preserved farmland
– Publicly controlled park space
– Tourism attracted by open space
• Ancillary effects of any direct expenditures
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7. Privately Controlled Open Space
• Acreage: preserved farmland 59.6K + land trust 42.0K = 101.6K
• Satellite imagery isolates only agricultural uses: preserved
farmland 35.7K + land trust 14.6K = 50.3K
• Commercial activities on small community gardens not included
• USDA/Census data on sales and employment by county,
apportioned
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8. Estimated Annual Direct
Economic Activity on Privately
Controlled Open Space (in $M)
County Sales Employment
Bucks $1.1 25
Chester $5.5 123
Delaware $0.2 16
Montgomery $1.0 24
Philadelphia $0.5 19
TOTAL $8.2 207
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9. Publicly Controlled Open Space
• Budget data obtained from federal/state/county/municipal parks
and related departments
• Independence National Historic Park not included, recreation
portions of “parks and recreation” departments not included
• Municipal parks account for 34.5K out of 95.7K acres, but only
municipalities with park acreage >200 acres included (16% of
municipalities and 43% of acreage)
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10. Estimated Annual Direct
Economic Activity on Publicly
Controlled Open Space (in $M)
Budgets Employment
Bucks $13.7 187
Chester $11.1 137
Delaware $13.8 188
Montgomery $12.7 173
Philadelphia $12.6 171
Total $63.9 856
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11. Estimated Annual 5-County Total
Economic Impact of All Protected
Open Space (in $M)
5-County Total Philadelphia Bucks Chester Delaware Montgomery
Expenditures $135.6 $24.7 $27.9 $30.7 $26.5 $25.8
Employment 1650.3 295.3 335.6 394.5 314.4 310.5
Earnings $76.8 $14.4 $13.8 $20.3 $14.1 $14.1
Local Taxes $1.0 $0.9 $0.0 $0.1 $0.0 $0.1
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12. Tourism Activity
• Protected open space a significant component of Philadelphia
region tourism industry
– 2007 survey of international visitors ~ 16% participated in outdoor
activities
– Out of 30M visitors, top attractions incl. Valley Forge (1.3M), Longwood
Gardens (730K)
• Tourism industry as a whole - $9.3B in expenditures supporting
87K employees and $2.8B earnings, and generating $600M in
local/state taxes
• Assuming 2% attributable to protected open space - $186M in
expenditures supporting 1,750 employees and $56M earnings,
and generating $12M in local/state taxes Econsult Corporation

13. Estimated Annual 5-County Total
Economic Impact of All Protected
Open Space (in $M)
5-County Total Philadelphia Bucks Chester Delaware Montgomery
Expenditures $322.2 $131.3 $44.9 $48.3 $41.7 $56.0
Employment 3,396 1,059 570 586 506 674
Earnings $133.2 $46.0 $19.0 $25.5 $18.9 $23.7
Local Taxes $6.8 $5.0 $0.4 $0.4 $0.4 $0.6
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14. Context and Commentary
• Estimates intended to be rough and conservative
• Impact relative to overall regional economy – insignificant
• Impact relative to how protected open space is often perceived –
significant
• Little to no overlap with other impact types from this study
– Environmental services provided – no overlap
– Direct use benefits / Tourism – small overlap with usage fees
– Property value impact – no overlap
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15. Economic Value Components
• Job and revenue generation
• Environmental services provided
• Direct use benefits
• Property value impact
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16. Environmental Services Provided
• Air Pollution
• Ecosystem Services
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17. Air Pollution Benefits
• Open space offers the ability to remove significant amounts of air
pollutants
• Most of the air pollution benefits are generated by the tree canopy cover
found on the open space parcels
• Trees improve air quality by removing NO2 , SO2 , CO, O3 , and PM10
• Trees help clean the air by storing and sequestering carbon in their
biomass
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18. Air Pollution Benefits
• Tree canopy amounts were estimated from satellite land cover
data
• Air Pollutant Removal amounts were estimated using the i-Tree
Vue model from the US Forest Service

19. Tree Canopy Cover
Preserved
County County Federal Municipal Non-Profit State Total
Farmland
Bucks 3,642 0 3,959 1,387 2,838 8,364 20,189
Chester 3,229 623 3,716 3,267 14,065 4,477 29,377
Delaware 594 103 1,861 0 1,421 1,955 5,934
Montgomery 2,332 677 3,673 709 2,450 2,206 12,047
Philadelphia 3,774 0 115 0 254 59 4,202
Total 13,571 1,404 13,324 5,362 21,028 17,060 71,749
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20. Pollutant Removal (tons)
Pollutant (tons) Bucks Chester Delaware Montgomery Philadelphia Total
O3 310 446 93 185 66 1,099
PM10 325 468 97 194 69 1,153
NO2 156 224 47 93 33 553
SO2 69 99 21 41 15 244
CO 17 24 5 10 4 59
Pollutant ( Thousands
tons) Bucks Chester Delaware Montgomery Philadelphia Total
Carbon Sequestration 27 39 8 16 6 95
Carbon Storage 815 1,175 244 488 174 2,895

21. Air Pollution Benefits
• Benefits were calculated by multiplying the pollutant removal
amounts by the externality value of the pollutant
• Externality values are considered the estimated costs of pollution
to society that is not accounted for in the market price of the
goods or services that produced the pollution
• One example is the value that society would have to pay in areas
such as healthcare if trees did not remove these pollutants due
to increased cases of asthma and other respiratory conditions

22. Air Pollution Benefits
Value ($million) Bucks Chester Delaware Montgomery Philadelphia Total
O3 $ 2.78 $ 4.01 $ 0.83 $ 1.66 $ 0.59 $ 9.88
PM10 $ 1.95 $ 2.81 $ 0.58 $ 1.16 $ 0.41 $ 6.92
NO2 $ 1.40 $ 2.02 $ 0.42 $ 0.84 $ 0.30 $ 4.97
SO2 $ 0.15 $ 0.22 $ 0.05 $ 0.09 $ 0.03 $ 0.54
CO $ 0.02 $ 0.03 $ 0.01 $ 0.01 $ 0.00 $ 0.08
Total $ 6.30 $ 9.08 $ 1.89 $ 3.77 $ 1.34 $ 22.38
Value ($million) Bucks Chester Delaware Montgomery Philadelphia Total
Carbon Sequestration $ 0.56 $ 0.80 $ 0.17 $ 0.33 $ 0.12 $ 1.97
Carbon Storage $ 16.86 $ 24.30 $ 5.05 $ 10.09 $ 3.59 $ 59.88
Total $ 17.41 $ 25.10 $ 5.21 $ 10.42 $ 3.71 $ 61.86

23. Ecosystem Services
• In addition to air pollution removal, open space parcels also
provide a number of valuable ecosystem services
• Examples include: waste treatment, disturbance buffering, plant
and animal habitat and others
• The amount and type of ecosystem services generated depends
on the land cover of the preserved open space

24. Value Transfer
• Utilized value transfer techniques to generate estimates of
ecosystem service values
• Value transfer has become a practical way to inform policy
decisions when primary data collection is not feasible due to
budget or time constraints
• It is important tool because it can be reliably used to the
economic value associated with a particular landscape, based on
existing research for considerably less time and expense than a
new primary study

25. Ecosystem Service Methods
• Utilized satellite land cover data to estimate the amounts of
various land cover types
• Ecosystem service flow values were then determined by
multiplying the amount of land cover types by the estimated
dollar value per acre for each ecosystem service
• We used the mean value of the studies cited by Costanza et al.
(2005) for a similar study in New Jersey; the Costanza report
identified and used over 100 earlier studies, including 94 studies
that contained original research and were published in peer-
reviewed journals

26. Ecosystem Services Benefits
Ecosystem Service
($Million) Bucks Chester Delaware Montgomery Philadelphia Total
Disturbance Prevention /
Flood Control $ 15.36 $ 13.80 $ 4.23 $ 4.06 $ 5.35 $ 42.80
Waste Treatment $ 3.11 $ 4.66 $ 0.86 $ 1.32 $ 0.87 $ 10.82
Water Supply $ 9.47 $ 11.72 $ 2.91 $ 4.45 $ 2.54 $ 31.09
Pollination $ 3.61 $ 5.57 $ 1.04 $ 2.21 $ 0.66 $ 13.09
Habitat Refugium $ 30.37 $ 42.93 $ 7.17 $ 17.36 $ 4.28 $ 102.10
Soil Formation $ 0.12 $ 0.26 $ 0.04 $ 0.08 $ 0.02 $ 0.52
Total $ 34.10 $ 48.75 $ 8.25 $ 19.64 $ 4.96 $ 115.71

27. Context and Commentary
• Estimates intended to be rough and conservative
• The estimates are conservative due to:
– Gaps in the valuation literature
– Distortions in current prices used to estimate the values are carried
through the analysis
– Most studies are based on individuals’ willingness to pay
• Little or no overlap with other impacts estimated in the study
– No internal overlap within environmental services categories
– Little or no overlap with property value impact

28. Economic Value Components
• Job and revenue generation
• Environmental services provided
• Direct use benefits
• Property value impact
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29. Direct Use Benefits
• Preserved open space provides value through the recreational activities
enjoyed on the open space
• Value are determined based on a consumer’s “willingness to pay”
(WTP) for the recreational experience
• WTP represents the amount of money residents save by not having to
pay market rates to partake in many of the recreational activities
provided by the open space
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30. Direct Use Benefits
• The direct use benefits were quantified using methods based on the
Army Corps of Engineers “Unit Day Value” method
• Estimates of number of park visits were obtained from the SCORP data
collected from DCNR
• The activities enjoyed were estimated using data collected from State
Parks usage data
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31. Direct Use Benefits Methods
• We assumed that the users of County, State, and Federal lands
engaged in the same types of activities in the same proportions
• We estimated the average direct-use benefit enjoyed by the average
State Park visitor using State Park usage data and unit day values
• For municipal parks we used the average “unit day value” assigned to
the general recreation category
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32. Direct Use Benefits Methods
• Using SCORP data we estimated:
– The number of times that average households participated in outdoor
recreation in the past year
– What percentage of the recreational activities took place on the various
types of open space

33. Direct Use Benefits Methods
• The average household in the study area:
– Participated in 36 outdoor recreation activities in the past year; this
resulted in 53 million estimated outdoor recreation activities
– Visited a municipal park for 38% of their outdoor activities, a county park
for 11%, state park/recreation area for 17% and federal park/recreation
area for 8%

34. Direct Use Benefits
Value ($millions) Bucks Chester Delaware Montgomery Philadelphia Total
Local/Municipal $ 20.16 $ 15.50 $ 18.17 $ 26.50 $ 49.92 $ 130.24
County $ 51.20 $ 39.37 $ 46.14 $ 67.30 $ 126.80 $ 330.81
State $ 79.12 $ 60.84 $ 71.31 $ 104.01 $ 195.96 $ 511.25
Federal $ 37.23 $ 28.63 $ 33.56 $ 48.95 $ 92.22 $ 240.59
Total $ 187.71 $ 144.33 $ 169.19 $ 246.76 $ 464.89 $ 1,212.87

35. Context and Commentary
• Estimates intended to be rough and conservative
• Does not include data for activities that occur on land trust
owned land
• Minimal overlap with other categories
– Direct use benefits / Tourism – small overlap with usage fees
– Likely some overlap with the health care cost savings estimates (users
accounting for health care savings when deciding on willingness to pay)
– Some overlap with property value impact, which accounts primarily for
aesthetics of proximity to open space but may also account for
convenience of direct use)

36. Health Care Cost Savings
• The importance of physical activity in reducing the morbidity and
mortality from a number of chronic diseases is well established in the
medical literature
• Exercising 3 or more times per week at a moderate to strenuous pace is
considered enough to generate health benefits
• Strong evidence shows that when people have accesses to parks and
open space, they are more likely to meet or exceed the minimum
exercise requirements.
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37. Health Care Cost Savings
• The cost savings can be thought of as the “costs avoided” by a
physically active person compared to a physically inactive person
• The costs savings per physically active person were estimated using
the Physical Inactivity Cost Calculator developed by East Carolina
University
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38. Cost Categories
• We included 5 costs of physical inactivity:
– Direct Medical Costs: the costs associated with treating the disease(s)
attributable to physical activity
– Indirect Medical Costs. Pain and suffering due to the medical conditions, a
reduction in quality life and shorter life expectancy
– Direct Workers Compensation Costs. Physically inactive persons are
more likely to incur worker compensation injuries and have longer
recovery times
– Indirect Worker Compensation Costs. These costs include the cost of
processing the compensation claims as well as other administrative costs
– Lost Productivity. These include missed work associated with health
conditions related to physical inactivity, absenteeism, and “presenteeism”

39. Health Care Savings Methods
• Using SCORP data we estimated:
– The number of working-age residents living in the study area that engage
in moderate or strenuous activities at least 3 time per week
– The proportion of that exercise that is engaged in at a park or on a trail

40. Health Care Savings Methods
• We found that:
– 38% of the working age population of the suburban counties and 33% of
City residents meet the exercise requirements
– 41% of moderate or strenuous exercise occurred at a park or a trail

41. Health Care Benefits
Cost Savings
($ Million) Bucks Chester Delaware Montgomery Philadelphia Total
Direct Medical Cost
Savings $ 34.04 $ 26.02 $ 29.56 $ 42.51 $ 77.49 $ 209.63
Indirect Medical Cost
Savings $ 102.13 $ 78.07 $ 88.67 $ 127.53 $ 232.48 $ 628.88
Direct Workers
Compensation Cost
Savings $ 0.25 $ 0.19 $ 0.22 $ 0.32 $ 0.58 $ 1.57
Indirect Workers
Compensation Cost
Savings $ 1.02 $ 0.78 $ 0.88 $ 1.27 $ 2.32 $ 6.27
Lost Productivity $ 99.72 $ 76.23 $ 86.58 $ 167.35 $ 305.07 $ 734.95
Total $ 237.17 $ 181.29 $ 205.91 $ 338.97 $ 617.95 $ 1,581.29

42. Context and Commentary
• Likely some overlap with the direct use benefit estimates; as
noted previously, users accounting for health care savings when
deciding on willingness to pay
• Substitution effect vis a vis direct use and health care benefits
– Present calculations represent benefits associated with use of protected
open space
– Not the same as costs associated with unavailability of protected open
space, as some will substitute to other recreational/exercise outlets

43. Context and Commentary
• Therefore it matters whether the inquiry is “what is the benefit of
its existence” or “what is the cost of its removal”
– Magnitude of costs may be less than magnitude of benefits, because of
substitution
– Costs/benefits may not be linear as protected open space is
added/subtracted
– Not all open space is alike, in terms of recreational/exercise use

44. Economic Value Components
• Job and revenue generation
• Environmental services provided
• Direct use benefits
• Property value impact
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45. Property Value Impact
• Data:
– Universe of all arms-length home sales in the city and suburbs from
2005-2009 = ~230,000 transactions
– Open space parcel file from DVRPC
• Home sales are geo-coded and distance to nearest open space parcel
is computed
• Hedonic valuation regression is estimated, with open space variables
added to the specification
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46. Property Value Impact
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47. Property Value Impact
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48. City Homes are Actually More
Proximate to Open Space than
Suburban Homes
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49. Regression Results I
Suburban County Regression
N=127,756, R-sq=0.71
Variable Label Est. Coeff. S.E. t Value Pr > |t|
Intercept Intercept 11.85407 0.00959 1235.71 <.0001
qtr_mi_ospace dummy=1 if <=1/4 mile from open space 0.0553 0.00309 17.9 <.0001
Dist_OSpace distance to open space (mi.) -0.03625 0.00827 -4.38 <.0001
ospace_acres acreage of nearest open space 0.00001974 3.11E-06 6.36 <.0001
Philadelphia County Regression
N=100,457, R-
sq=0.64
Variable Label Est. Coeff. S.E. t Value Pr > |t|
Intercept 6.65084 0.1563 42.55 <.0001
qtr_mi_5 dummy=1 if <=1/4 mile from open space >=5 acres 0.06922 0.00963 7.19 <.0001
dist_ospace_5 distance to open space (mi.) >=5 acres -0.29739 0.0577 -5.15 <.0001
ospace_acres acreage of nearest open space 0.00002143 1.01E-05 2.12 0.0339
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50. Proximity to Open Space is More
Valuable to City Dwellers
Change in House $Values by
Proximity to Open Space
$35,000
$30,000 Philadelphia
Suburbs
$25,000
$20,000
$15,000
$10,000
$5,000
$0
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1
Miles from Open Space
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51. An Acre of Open Space is More
Valuable to City Dwellers
%Change in House Value for Each 1,000 acres of
Open Space within 1/4 mile
2.20%
2.17%
2.15%
2.10%
2.05%
2.00% 1.99%
1.95%
1.90%
City Suburb
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52. But an Acre of Open Space Has a
Higher $Value in the Suburbs, due to
their Higher House Values
$Change in House Value for Each 1,000 acres of
Open Space within 1/4 mile
$6,000
$5,034
$5,000
$4,000
$3,000
$2,491
$2,000
$1,000
$0
City Suburb
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53. It takes Large Quantities of Open Space to
Have a Meaningful Impact on House Values
$Change in House Value by Quantity of
Open Space
$7,000
$Value-City
$6,000 $Value-Suburbs
$5,000
$4,000
$3,000
$2,000
$1,000
$0
1,000
1,050
1,100
50
1,150
1,200
1,250
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
950
0
Acreage of Open Space within 1/4 mile
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54. The Value of Open Space has
Grown Over Time
%Change in Value of Proximity (<1/4 mi.) to
Open Space, 2005-2009
12.0%
10.2%
10.0% City%
9.0%
Suburb% 8.5%
8.0%
6.2%
6.0%
4.0%
2.1%
2.0% 1.5%
0.7% 0.7%
0.4% 0.6%
0.0%
2005 2006 2007 2008 2009
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55. Both the % and $ Values of Open Space has
Increased by More in the City than Suburbs
$14,000
y = 2371.5x - 5E+06
R² = 0.749
$12,000
$11,741
$10,336
$10,000
$9,746
$8,000
$Value
$7,088 City$
Suburb$
$6,000 Linear (City$)
$5,318 Linear (Suburb$)
y = 876.06x - 2E+06
$4,000 R² = 0.5798
$3,749
$2,000
$1,693
$1,420
$1,073
$806
$0
2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 Econsult Corporation
Year

56. Econsult Corporation

57. Econsult Corporation

58. There is Substantial Variation in the Value of
Proximity, Across Sites
$ Value of House Proximity to Case Study Sites
Radnor $175,756
Clark Park $45,879
Peace Valley $35,155
Hopewell $8,273
Perkiomen $4,766
Glenolden $382
-$29,319 Honeybrook
-$50,000 $0 $50,000 $100,000 $150,000 $200,000
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59. Econsult Corporation

60. The More Developed an Area, the More
Valuable Open Space is to Residents
%Value of Proximity to Open Space by
Planning Area
16.0%
14.4%
14.0%
12.0%
10.0%
8.0%
6.7%
6.0%
4.0%
2.0% 1.1%
0.7%
0.0%
Core City Developed Growing Suburb* Rural Area*
Community
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61. But When Adjusted for House Values, Open
Space Has Nearly Identical $ Value in Cities
and Developed Suburbs
$Change in House Values by
Proximity to Open Space
$20,000
$18,000 Core City
$16,000 Developed Community
Growing Suburb
$14,000
Rural Area
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1
Miles from Open Space
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62. Summary and Coming Attractions
• Being within walking distance to open space has a positive and
statistically significant value in almost all cases
– 1-15% increase in home values, depending upon size and location
– Only exception is small parks in the city
• Although urban dwellers willing to pay more for open space,
suburban dwellers actually pay more due to their higher home
values
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63. Summary and Coming Attractions
• Policy implications
– Holding the total amount of open space constant, lots of smaller open
spaces create more value than fewer but larger open spaces
– Urban dwellers enjoy urban space more, but suburban dwellers will pay
more (in the form of total house prices)
• Coming soon: total economic and fiscal value of open space
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64. Questions/Comments?
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