Map of the benefits of Park 101, which are dispersed as a function of proximity.

Park 101 Cost Benefit Analysis

OVERVIEW

Winter 2018, group project

This cost-benefit analysis of Park 101 was created as part of a semester project for an Urban and Regional Economics class. The goal of the project was to evaluate whether the net benefits of building Park 101, as capitalized in wages, property values, and business revenues, would outweigh the net costs of the project. 

I chose to investigate this park because I wanted to quantify the sometimes abstract benefits of adding green space to urban environments.

PERSONAL CONTRIBUTIONS

•Created all maps and graphics
•Crafted presentation narrative
•Developed economic analysis framework
•Managed project and team

 
Business.png

Tier 1: Business people
Proximity: Within 5 min walk
Benefits: Capitalized in wages

Residents.png

Tier 2: Local residents
Proximity: Within 1/2 - 1 mi.
Benefits: Capitalized in bid-rent

Far Away.png

Tier 3: Nearby visitors
Proximity: 1-2 miles from park
Benefits: Capitalized in business $

Nearby.png

Tier 4: Visitors from afar
Proximity: Over 2 miles
Benefits: Dispersed

Benefits of Park 101 as a function of proximity

Benefits of Park 101 as a function of proximity

 
 
 
 
 

PROCESS

  1. Understand the world with and without Park 101

  2. Define user groups and designate distance ranges for each group based on expected values and behaviors

  3. Determine how Park 101’s benefits are capitalized within each group

  4. Use geographic analysis to calculate existing business revenues, employee salaries, and bid-rent curves within defined distance ranges 

  5. Use these numbers to calculate conservative and optimistic estimates for the benefits within each user group

  6. Calculate potential overruns for the cost given in Park 101’s feasibility study using similar park case studies

  7. Compare costs and benefits for conservative and optimistic scenarios to determine if park should be constructed

ANALYTICAL FRAMEWORK

  1. At different distances, Park 101 will attract different user demographics with different values and behaviors

  2. Because of differing values and behaviors, these groups will receive different benefits from Park 101

  3. Each group’s benefits will be capitalized through a different indicator based on their distance from the park

  4. Therefore, the benefits of Park 101 are a function of proximity

CONCLUSION

Park 101 should be constructed. The total benefits of Park 101, as capitalized in wages, bid-rents, and business revenues, exceed costs in both conservative and optimistic scenarios.