The Price of Biodiversity
What is the ecological quality of nearby nature worth? This page shows part of my PhD research at Aarhus University: a first revealed-preference estimate of how biodiversity is reflected in Danish house prices.
Work in progress. This page summarises preliminary findings from an unpublished working paper. The estimates are associations, not causal effects, and may change before the paper is released. The map shows ecological-quality scores, not property valuations.
An implicit price of zero
When a road or a building is appraised, its costs and benefits are weighed in money. Biodiversity usually enters that calculation at zero. Not because it is worthless, but because no one has measured what it is worth.
Denmark has a national map of ecological quality, the Biodiversitetskort, that scores every part of the country for its potential to support wild species. My research asks a simple question: do Danish homebuyers pay more to live near higher-quality nature, and if so, how much?
Ecological quality across Denmark
Average bioscore within one kilometre of the homes sold in each parish, from about 960,000 recorded home sales over 2015 to 2025. Darker means richer nature.
The interactive version of this map needs JavaScript. The figure above shows the same data: the average ecological quality within one kilometre of homes in each Danish parish.
How to read this. The colour shows the Biodiversitetskort bioscore, a measure of habitat quality and the presence of species of conservation concern, averaged over the homes sold in each parish. A higher score means richer potential for wild life. This is not a property valuation, and it does not tell you what nature is worth for any individual home. Parishes with fewer than 30 sales are left grey because their average is too noisy to show.
View the data as a table
What homebuyers reveal
Three findings from the analysis, stated in round numbers because the work is still preliminary.
Nature has a price
Homes surrounded by higher-quality nature sell for more. A one-step increase in the local bioscore is associated with about 3 percent higher prices, roughly DKK 60,000 to 70,000 for a typical home.
Mostly about who lives where
Around two-thirds of that raw difference reflects wealthier buyers choosing to live near nature, rather than the price of nature itself. The premium that remains, comparing homes within the same neighbourhood, is smaller but real.
A local effect
The premium is strongest for nature within a few hundred metres of the home and fades to nothing within a few kilometres. That is what you would expect for something experienced on a daily walk.
How it is measured
The estimate comes from a hedonic price model: about 850,000 geocoded home sales, the subset of the roughly 960,000 recorded sales shown on the map that could be precisely located and matched to the Biodiversitetskort, with controls for the size, age, and construction of each home, its energy rating, distance to the coast and to transport, noise exposure, and the general greenness of the surroundings. Comparing homes within the same parish and the same quarter separates the role of ecological quality from the many other things that drive prices.
Greenness is not the same as biodiversity. A mown lawn and a species-rich meadow can look equally green from a satellite. The model holds greenness constant, so the estimate reflects ecological quality rather than just the amount of vegetation.
What this is, and what it is not
What it is
- A first revealed-preference estimate of the value of biodiversity quality in a Danish property market.
- A way to replace the implicit zero in cost-benefit analysis with an evidence-based number.
- An honest account, including how much of the raw premium is explained by who lives where.
What it is not
- A property valuation, or a price for the nature near any single home.
- A causal claim. These are associations, with the limits any observational study carries.
- A finished result. The paper is unpublished and the numbers may change before release.
Where this fits
This is part of my PhD at Aarhus University on measurement, uncertainty, and decision-making in infrastructure and environmental policy. The aim is to give cost-benefit analysis a defensible price for biodiversity, so that the value of nature is counted rather than assumed away.
A short summary of the working paper sits with my other research. A link to the full paper will be added when it is released.
Data sources
Ecological quality: Biodiversitetskort (bioscore, 2021 edition), Danish Centre for Environment and Energy (DCE), Aarhus University.
Parish boundaries: DAGI, Styrelsen for Dataforsyning og Infrastruktur (SDFI) via Dataforsyningen, licensed CC BY 4.0.
Property transactions: compiled from public Danish property records, 2015 to 2025.
Greenness: Normalized Difference Vegetation Index from Sentinel-2 imagery.
Interested in this work?
I am always glad to discuss biodiversity valuation, environmental cost-benefit analysis, and the economics of nature.