Open Access

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

Stephen Gibbons, Cong Peng and Cheng Keat Tang

Abstract

This paper values the environmental benefits of historic, navigable canals using property values. We improve on standard methods by controlling for micro-geographic 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 subsequently 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.

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