Revealing Preferences for Urban Biodiversity as an Environmental Good

Biodiversity influences human well-being through multiple pathways and is essential for human existence. Since a large share of the global population concentrates in cities, urban areas are a critical space where humans and nature interact and biodiversity related preferences are formed. Despite this, relatively little research on urban dwellers’ preferences and willingness to pay (WTP) for urban biodiversity exists. Information on WTP for biodiversity can help to identify potential synergies and trade-offs, and to guide biodiversity policies and management. Thus, this study investigates heterogeneous preferences for biodiversity as an environmental good using a revealed preference approach based on a real estate dataset comprising around 140,000 unique entries of rental and sales transactions of apartments. I find that WTP for biodiversity is exclusively positive and economically relevant. Urban biodiversity conservation and enhancement might thus result in co-benefits for the local urban population. In a criterion validity assessment, I identify a novel satellite-based biodiversity indicator as a potentially suitable alternative to a conventional species richness indicator. This is relevant for benefit transfer studies and primary biodiversity valuation in data scarce regions