Conference Agenda

Biodiversity has reemerged as a central focus in research on ecosystem–economy interactions, and a canonical challenge is to disentangle the value of species variety from that of sheer abundance of individual organisms. This paper provides the first causal evidence that real estate markets value species diversity of street trees in a mega-urban setting. We study New York City’s street-tree changes from 1995–2015, a period marked by substantial shifts in species composition. Our identification strategy exploits the Asian longhorned beetle outbreak, an invasive pest that prompted the targeted removal of susceptible host species and their replacement with non-host species. This response generated quasi-experimental variation in species richness while leaving total tree abundance largely unchanged. Over the two decades of the study period, our estimates suggest that approximately 7.4% of housing price growth can be causally attributed to changes in street tree species richness. We further show that increases in functional diversity associated with enhanced aesthetic and experiential attributes, such as year-round foliage presence, variation in flowering patterns, and root-system diversity that may improve stormwater absorption, are strongly correlated with the housing market capitalization of species diversity.