Residential Pricing in Addis Ababa: Do Urban Green Amenities Influence Residents’ Preferences for a House?

Abstract

Urban green amenities can play a vital role in realizing sustainable development and healthy life in cities. However, the direct economic value of green amenities is seldom measured in monetary terms, and studies on urban green amenity valuation in developing countries, including Ethiopia, are scanty. This study uses the hedonic pricing method to investigate the impact of urban green amenities on subjective as well as actual rental prices of residential houses in Addis Ababa. Results indicate that residents attach a positive value to urban green amenities. Specifically, the availability of, and access to, attractive landscape and natural features in a nearby area increase the average price of a house by 45 percent. Similarly, availability and access to parks increase the average rental value of a house by 50 percent. This indicates that residents are willing to pay for green amenities in their neighborhood. Incorporating green amenities in designing urban residential areas and real estate developments can provide premium benefits to investors.