Using wellbeing data to assess benefits for residents.

Today, more than half of the world's population lives in urban areas - and this share is expected to rise to more than two-thirds by 2050. The growth of cities puts increasing pressure on public open spaces such as parks to provide additional room for housing, especially in dense inner cities.

Yet most people consider parks important for their quality of life. In fact, UN Sustainable Development Goal 11 - "Sustainable Cities and Communities" - aims to provide "universal access to safe, inclusive and accessible green and public spaces". So how can we assess the value of a park against the value of housing - or any other use?

Finding a measure

To assess the benefit of an urban amenity, economists typically try to find random changes in the amenity and estimate resulting changes in house prices nearby in order to infer how much people would be willing to pay to live close to it. But when it comes to parks, the fundamental problem with this method is that the stock of parks remains largely fixed over time and households in their surroundings are not just randomly put there but are self-selected.

In a recent study, I and my co-authors Jan Goebel and Katrin Rehdanz, work around these issues not by looking at changes in parks themselves but, instead, at changes in their use values brought about by Covid-19 restrictions - a time in which households' locational choices were also largely predetermined. Arguably, having a park close to home during the pandemic became suddenly and unexpectedly much more valuable compared with "normal times".

Instead of house prices, we look at residents' self-reported life satisfaction, a validated measure that is now routinely collected by the Office for National Statistics to capture overall personal wellbeing in the UK and which is used for policy analysis by HM Treasury. Importantly, accounts of life satisfaction can be used to assign a monetary value to intangible impacts, as shown by Daniel Kahneman and Robert Sugden, and so have been applied before to value urban amenities.

Our case study is Germany, where - unlike in many other countries - visiting parks was always permitted and they remained open throughout the pandemic. We compare the change in wellbeing of residents living close to a green space (defined as within 1km of the household) to that of residents living further away, from before to during Covid-19. We use data from all German cities and metropolitan areas with more than 100,000 inhabitants.

Green spaces can play an important buffering role during stressful times

Feeling less lonely

We have three main findings. First, living close to a green space during Covid-19 had a significant positive effect on residents' overall life satisfaction. But there is evidence of diminishing returns when it comes to both the size and number of green spaces. We find the strongest effects for patches between 15 and 20 hectares (20 hectares is 400m by 500m) such as Green Park in London.

Second, residents living near a green space showed significantly fewer symptoms of mental ill-health, especially anxiety and depression, and were less likely to feel lonely. This suggests parks played a buffering role during these stressful times.

Third, we calculate that a resident without a nearby green space (of at least 15 hectares) would have to be compensated about €5,950 per year to arrive at the same level of life satisfaction as a resident with access to green space during the restrictions.

Given that more than 16 million residents in Germany live near a green space, our results point towards substantial benefits of parks during the pandemic, with similar implications for urban areas in other countries.

How can we use this to assess a park's value in normal times? Marco Marani and colleagues have estimated that the annual probability of a pandemic with similar impact as Covid-19 in a given year of one's life is about 2%. If we adjust our value accordingly, we arrive at an expected monetary benefit of a nearby green space of €5,950 x 0.02 = €119 per resident in any given year.

This means that someone without a nearby green space would need an expected compensation of about €119 per year to achieve the same level of life satisfaction as someone who does. This is a lower bound, as these expected benefits are in addition to any baseline benefits that green spaces may already provide during normal times.

So, green spaces can play an important role during stressful times, and the sudden and unexpected variations in use values that such periods induce help us to put a price tag on parks during normal times.

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21 October 2025     Paper Number CEPCP716

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This publication comes under the following theme: Causes and effects of wellbeing, Targeting policy at wellbeing