Often in planning and architecture we have a gut feeling that amenities like design, heritage and greenspace matter in the creation of desirable, well-functioning neighbourhoods. We cling to this idea because it ‘feels right’ or in our experience it seems to work, but hard evidence that design adds value has always been elusive. What makes the findings of our most recent research exciting is that our estimate of the capitalisation effect for distinctive architecture is based on a quantitative metric and comes closer to a causal interpretation than previous studies. In fact, for each step on a five-point scale, ranging from not-at-all-distinctive to very distinctive, we find residential property prices change by £38,700. This is a substantial effect, even if within neighbourhoods our index typically does not vary by more than one step.
Why is this important? In terms of economic theory architectural beauty can be considered a local public good – no one can be denied the pleasure of looking at an appealing building and that appeal does not deteriorate as people enjoy it.