Valuing the Environmental Benefits of Canals and Canal Restoration Using House Prices

Abstract

This article values the environmental benefits of historic, navigable canals using property values. We improve on standard methods by controlling for microgeographic fixed effects and applying a difference-in-differences method to canal restoration. We find a localized price premium within 100 m, around 5% before the 2008 recession, dropping to 3.4% by 2016. These effects are driven by urban canal-side properties with a direct outlook on the canals or immediate access. These locations are also attractive for developers, with a higher proportion of new-build sales. Our estimates suggest that canals generate land value uplift of £0.8–£0.9 billion in England.