An Economic Valuation of Urban Green Spaces in Kuala Lumpur City
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Pertanika J. Soc. Sci. & Hum. 26 (1): 469 - 490 (2018) SOCIAL SCIENCES & HUMANITIES Journal homepage: http://www.pertanika.upm.edu.my/ An Economic Valuation of Urban Green Spaces in Kuala Lumpur City Nur Syafiqah, A. S.1, A. S. Abdul-Rahim1*, Mohd Johari, M. Y.2 and Tanaka, K.3 1Department of Economics, Faculty Economics and Management, Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia 2Department of Landscape Architecture, Faculty of Design and Architecture, Universiti Putra Malaysia, 43400 UPM, Serdang, Selangor, Malaysia 3Research Centre for Sustainability and Environment, Shiga University, Japan ABSTRACT An economic value of urban green space (UGS) in Kuala Lumpur (KL) city is estimated in this study. A global model and a local model are formulated based on hedonic price method. The global and local models were analysed with an Ordinary Least Squares (OLS) regression and a Geographically Weighted Regression (GWR) respectively. Both the models were compares to see which model offered a better result. The results of OLS regression illustrated that Titiwangsa and Forest Research Institute Malaysia (FRIM) offer the highest economic value for model 2 and 3 respectively. The results of GWR determined that the economic value of an UGS can be analysed by the region. The GWR result revealed that FRIM provides high economic value to all the residential areas in KL city. However, the economic value of Titiwangsa is not valuable for the residential areas in KL city including Mont Kiara Pines, Jinjang Selatan, Segambut Garden, Bandar Menjalara and Taman Bukit Maluri. As a conclusion, even though Titiwangsa generates the highest economic value, it is only significant at certain residential areas as proved by the local model. In terms of model application, ARTICLE INFO the local model performed better than the Article history: Received: 21 March 2017 global model. Accepted: 13 December 2017 E-mail addresses: Keywords: Economic valuation, geographically [email protected] (Nur Syafiqah, A. S.), weighted regression model, hedonic pricing model, [email protected] (A. S. Abdul-Rahim), [email protected] (Mohd Johari, M. Y.), urban green space [email protected] (Tanaka, K.) *Corresponding author ISSN: 0128-7702 © Universiti Putra Malaysia Press Nur Syafiqah, A. S., A. S. Abdul-Rahim, Mohd Johari, M. Y. and Tanaka, K. INTRODUCTION that KL has lost nearly 50% of its green The urban green space (UGS) can be defined spaces, mainly to residential development to as the range of urban vegetation, including cater for the population increase and some open spaces, parks, residential gardens, industrial development. Tyrvainen (2001) street trees and any other vegetation located also beleived that industrial development around the urban environment (Pietsch, activities could diminish the values of UGS. 2012). According to Saphores and Li (2012), As reported in KL Structure Plan 2020, the position of the UGS in cities is increasing currently, the total areas of UGS in KL city worldwide as a result of the expansion of only represents 6.5% of total land use and urban land fueled by urbanisation. City the amount that is available as public UGS is areas with a lot of greenery are aesthetically even less when private green spaces such as pleasing and attractive to residents and field golf are excluded. This issue has caused investors. general concern among local authorities. Based on the Kuala Lumpur (KL) City Various efforts have been taken by them Plan 2020 in The Star Online (2008), the to protect and maintain the existence of city expressed a vision of a network of UGS. However, it is noticed that existing high quality, accessible parks and economic statutes and policies over a recent decade generation to assist KL in becoming a were not sufficiently strong with regard more attractive city to live in and work to the protection they afforded to green at. The implementation of the greening spaces in KL. Luttik (2000), and Zhuo and city may create a more comfortable living Parves Rana (2012) claimed that it is not environment and provide space for healthy easy to come to a clear conclusion about recreational activities. Moreover, the the effectiveness of existing arrangement beautification of KL has been one of the for protecting UGS without much more factors that attracted significant foreign information, especially in terms of monetary investments to Malaysia and boosted value. the country’s rapid economic growth. In the case of Malaysia, Mohd Noor, Overall, urban green spaces have provided Asmawi and Abdullah (2015) is one of indispensable elements of aesthetic, the earliest ones that have a concern about ecological, recreational and economic this issue. They conducted a study about values. The economic values include the economic valuation of UGS in Subang property prices (Sadeghian & Vardanyan, Jaya, Selangor. However, KL city which 2013). Due to the demand and benefits of is the highest percentage of diminished UGS, the UGS in KL should be preserved. green area was not included in their study. In Malaysia, Yusof (2012) stated that It would be much useful if an analysis of the urban area of KL has almost tripled in economic valuation of UGS is conducted area since the 1950s; it is currently 243 km2. in KL city. At least it will offer valuable Unfortunately, Yaakup (2005) predicted information especially in terms of monetary 470 Pertanika J. Soc. Sci. & Hum. 26 (1): 469 - 490 (2018) Economic Values of Urban Green Spaces value of urban green space to the real estate (Kong, Yin, & Nakagoshi, 2007). House developers. Other than that, it will help the prices are regressed against sets of control government authorities to improve their variables. It includes structural attributes future policy specifically about land use of a house, neighborhood variables, and and development part by developing a environmental attributes. comprehensive improvement of monitoring Chin and Chau (2003) believed that the provision, extent, and condition of the property prices are associated with green space more thoroughly based on the their structural attributes. It includes size of monetary information. building lot, number of rooms and building Therefore, the economic value of age (Saphore & Li, 2012; Kong et al., 2007; the UGS, specifically in KL city, will be Morancho, 2003). However, Morancho estimated in this study. By using the hedonic (2003) mentioned that size of ancillary in the pricing method (HPM), the economic value building is also relatively important to the obtained in this study will prove the value house price. Forrest, Glen, and Ward (1996) of UGS in monetary value. The HPM stated that lot size also has a significant based on the ordinary least square (OLS) effect on house price. All of them concluded regression and geographically weighted that any functional space is considered to regression (GWR), together with geographic have a significant relationship with the information systems (GIS) are employed. house price. Other than structural attributes This study reveals the specific residential of the house, Geoghegan (2002) mentioned areas in KL city which are able to generate that the shortest distance between town economic value of UGSs. At the same time, and the house which is considered to be this study also helps the local authorities neighborhood variable also has a significant to develop a comprehensive improvement relationship with the house price. of monitoring the provision, extent, and Additionally, most of the previous condition of green space more thoroughly studies proved that environmental attributes based on monetary information. Lastly, work well towards the house price. They this study will contribute to the literature believed that there is an inverse relationship since there are limited studies conducted in between distance and property price (Boyer Malaysia regarding the economic valuation & Polasky, 2004; Cho, Bowker, & Park, of UGSs using GWR. 2006; Cho, Poudyal, & Roberts, 2008; Gibbon et al., 2013; Morancho, 2003; LITERATURE REVIEW Tajima, 2003;). Most of them also proved HPM is widely used to measure the economic that there is a positive relationship between value of UGS (Zhuo & Parves Rana, 2012). the size of UGS and property price (Boyer & Its value can be predicted from the prices Polasky, 2004; Cho et al., 2008; Morancho, of related actual market house transaction 2003). It shows that UGS has an important economic value. Pertanika J. Soc. Sci. & Hum. 26 (1): 469 - 490 (2018) 471 Nur Syafiqah, A. S., A. S. Abdul-Rahim, Mohd Johari, M. Y. and Tanaka, K. Based on previous studies, all the Pines, Mont Kiara the Residents, Bandar reviewed variables seem to have a significant Manjalara, Kepong Baru, Taman Bukit effect on the house price. Previous studies Maluri, Jinjang Selatan, Jinjang Utara, outside Malaysia have proven that the urban Kepong Garden, Segambut Garden, and green space attributes including the size of Desa Park City. The urban green spaces urban green space and its distance to the included Bukit Nanas, Batu Caves, Bukit residential area are important factors for Lagong, Dataran Merdeka, Desa Park house price. Therefore, all these variables City, Forest Research Institute Malaysia are used to estimate the economic value of (FRIM), KL City Centre (KLCC), Taman UGS in KL city. Tasik Permaisuri, Pudu Ulu, Rimba Bukit Kiara, Taman Tasik Perdana, Taman Tasik METHODS Titiwangsa, Taman Sains Rimba and The house price is used in order to measure Universiti Malaya Forest (UMF). the implicit value of UGS based on UGS There are six strategic zones in KL. attributes (that is, the distance between the However, the residential areas of this study residential area and the UGS and the size focused on Sentul-Menjalara zone for of the UGS). several reasons, one of which is that it has Based on Valuation and Property the largest population (445,000 persons), Service Department, the total number of land size (4657 hectares) and highest residential units in Kuala Lumpur in 2013 residential units (137,097 units of houses).