Urban heat mitigation: a theoretical and empirical assessment of economic valuation approaches

Abstract

Extreme heat in urban areas threatens citizens’ well-being, prompting cities to adopt heat mitigation measures. Economic valuation through stated preference (SP) methods provides insights into citizens’ willingness to pay (WTP) for such measures, but heat mitigation is a complex, intangible, subjective, and multi-dimensional valuation object. This study contributes both theoretically and empirically by categorizing three approaches to valuing urban heat mitigation: (i) effect-based, valuing the cooling effect itself, (ii) cause-based, valuing the measures causing cooling, and (iii) a hybrid approach integrating both. These approaches offer distinct insights but also present different challenges. Focusing on one important issue, we empirically test how the framing of cooling effects influences WTP using a split-sample discrete choice experiment (DCE) in Vienna with 2,194 respondents. Our results show that when cooling effects were made explicit (via pictograms or a separate attribute), respondents demonstrated higher WTP for greening measures, which could be attributed to increased attribute salience or the positive framing of the effects using visual aids. In turn, it suggests that respondents undervalue heat mitigation when not explicitly highlighted. These findings highlight the importance of explicit communication in SP studies to accurately reflect citizens’ preferences and improve the design of effective urban heat mitigation policies.

Key Policy Highlights

There is strong public support for urban heat mitigation, as reflected in a demonstrated willingness to pay (WTP) of €19 to €50 for various urban greening scenarios.

The representation of cooling effects in choice experiments significantly shapes citizens’ responses and valuation outcomes – WTP estimates are markedly higher when the heat reduction is explicitly and visually depicted.

Citizens place a distinct and high preference on cooling effects, indicating that such benefits should be clearly communicated when promoting urban greening initiatives.