Cool Cities: The Value of Green Infrastructure

This paper estimates the amenity value of urban trees. The empirical strategy exploits an ecological catastrophe—the emerald ash borer (EAB) infestation—to instrument for the evolution of the tree canopy in Toronto between 2008 and 2018. One additional tree within a range of 50m from the centroid of a house increases property price by about 1.2%, but the marginal returns to trees within a neighborhood are rapidly decreasing. One dimension of the tree premium relates to the cooling properties of urban trees: Green infrastructure provides shade and evapotranspiration in urban heat islands. To quantify the specific effect of the tree canopy on residential energy consumption, we exploit short-term weather fluctuations interacted with solar exposure induced by the positioning of trees and solar angles. Our findings suggest substantial energy savings from urban trees, which however only explain a small share of the overall amenity value of trees.