**4.2 Willingness to pay for social benefits**

Many respondents indicated willingness to pay for the social value experience derived from urban rooftop farming. While some were conservative about payment, "I don't have extra time to enjoy the rooftop farms" (32%); "I cannot afford to pay or buy the service" (19%), the majority of respondents (87%) were willing to pay. The average payment reported during the survey was HK\$ 220 per month/person/half square meter. In comparison with the current charge for renting a plot in an urban rooftop farm (HK\$ 190), this suggested an increased perception of social values among users.

Just asking questions about individual payment decisions encouraged respondents to consider the benefits and the maximization of utility. Willingness to pay was found to be related significantly to the degree of understanding of urban rooftop farming, level of education and income level. Willingness to pay increased with the cognitive level of participants from "no idea" to "have participated in urban rooftop farming." Practicing farmers were willing to pay more (HK\$ 232) than those that had not previously participated (HK\$ 194). Most of the respondents who are willing to pay were from higher levels of education (undergraduates and graduates), as well as higher-income groups (**Figure 4**).

#### **4.3 Cost-benefit analysis: The monetary influence of social values**

Apart from the multiple implications of social values in urban rooftop farming, this research also demonstrates the potential monetary influence through the application of cost-benefit analysis in comparing the marginal benefits (social values) with the existing benefits and costs (capital and recurrent). According to [25, 36], the following cost-benefit analysis components can provide an economic spectrum of social values in urban rooftop farming which can influence government decisionmaking and contribute to social well-being:

$$\text{Gross costs} = \text{Capital costs} + \text{Reccurrent costs} \tag{1}$$

$$\text{Gross benefits} = \text{Reccurrent benefits (or any other marginal benefits)} \tag{2}$$

$$\text{Net Benefit} = \text{Gross benefits - Recovery costs} \tag{3}$$

$$\text{Cost and Benefit ratio} = \frac{\text{Gross Bonefits}}{\text{Gross Costs}} \tag{4}$$

**109**

**Figure 4.**

*Significant factors in willingness to pay.*

costs and benefits.

*Social Value of Urban Rooftop Farming: A Hong Kong Case Study*

Payback Time = (

Net Present value = (*Net Benefit* <sup>∗</sup> (1 − (1 <sup>+</sup> *Discount Rate*))−project period) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ *Discount Rate Capital costs* (6)

Among the financial information obtained from operators, City Farm Kwun Tong was chosen as a prototype for this calculation due to its comprehensive

operational mode and representativeness of other farms in Hong Kong. Cost-benefit analysis in the study used the basic scenario of a rooftop farm in Hong Kong. The prices and amounts were all generic estimates in order to provide the minimum

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 1 *Cost and Benefit ratio*) <sup>∗</sup> *one year* (5)

*DOI: http://dx.doi.org/10.5772/intechopen.89279*

*Social Value of Urban Rooftop Farming: A Hong Kong Case Study DOI: http://dx.doi.org/10.5772/intechopen.89279*

*Agricultural Economics - Current Issues*

be measured in the employment indicator.

**4.2 Willingness to pay for social benefits**

as well as higher-income groups (**Figure 4**).

making and contribute to social well-being:

values among users.

were the two least important indicators among the social empowerment factors, in interview participants questioned "how can leadership be improved by just growing vegetables?" To some extent, this makes sense because it is hard for leadership development to be perceived by the users themselves unless there is an external instructor who guides the activity and highlights the purposes behind it. This may necessitate long-term observation of farm participation organized by experienced teams or working feedback from the employment company. At this point, there is no measurable index for conceptual benefits. In addition, the benefits of increased job opportunities for the society will only be realized when urban rooftop farming becomes a city-scale endeavor. Current rooftop farms are individually too small to

Many respondents indicated willingness to pay for the social value experience derived from urban rooftop farming. While some were conservative about payment, "I don't have extra time to enjoy the rooftop farms" (32%); "I cannot afford to pay or buy the service" (19%), the majority of respondents (87%) were willing to pay. The average payment reported during the survey was HK\$ 220 per month/person/half square meter. In comparison with the current charge for renting a plot in an urban rooftop farm (HK\$ 190), this suggested an increased perception of social

Just asking questions about individual payment decisions encouraged respondents to consider the benefits and the maximization of utility. Willingness to pay was found to be related significantly to the degree of understanding of urban rooftop farming, level of education and income level. Willingness to pay increased with the cognitive level of participants from "no idea" to "have participated in urban rooftop farming." Practicing farmers were willing to pay more (HK\$ 232) than those that had not previously participated (HK\$ 194). Most of the respondents who are willing to pay were from higher levels of education (undergraduates and graduates),

Apart from the multiple implications of social values in urban rooftop farming, this research also demonstrates the potential monetary influence through the application of cost-benefit analysis in comparing the marginal benefits (social values) with the existing benefits and costs (capital and recurrent). According to [25, 36], the following cost-benefit analysis components can provide an economic spectrum of social values in urban rooftop farming which can influence government decision-

Gross benefits = *Recurrent benefits* (*or any other marginal benefits*) (2)

Cost and Benefit ratio = *Gross Benefits*

Gross costs = *Capital costs* + *Recurrent costs* (1)

Net Benefit = *Gross benefits* − *Recurrent costs* (3)

\_\_\_\_\_\_\_\_\_\_\_

*Gross Costs* (4)

**4.3 Cost-benefit analysis: The monetary influence of social values**

**108**

**Figure 4.** *Significant factors in willingness to pay.*

$$\text{ing\\_to\\_pur\\_pur\\_} \newline \text{\\_\\_fagback\\_Time} = \left(\frac{1}{\text{Cost\\_and\\_Benefit\\_ratio}}\right) \* one\\_year\tag{5}$$

$$\text{Payback Time} = \left(\frac{1}{\text{Cost} \, and \,\,Benefit \, ratio}\right) \* one \,\, year \tag{5}$$

$$\text{NetPresent value} = \frac{\left(\text{Net } Benefit \* (1 - (1 + Discount \, Rate))^{-\text{project period}}\right)}{\text{Discount Rate}} \,\,\, \text{Capital costs} \tag{6}$$

Among the financial information obtained from operators, City Farm Kwun Tong was chosen as a prototype for this calculation due to its comprehensive operational mode and representativeness of other farms in Hong Kong. Cost-benefit analysis in the study used the basic scenario of a rooftop farm in Hong Kong. The prices and amounts were all generic estimates in order to provide the minimum costs and benefits.

First year revenues generated through urban rooftop farming were found to barely offset the costs in Hong Kong. In the prototype case, the gross costs and benefits of urban rooftop farming in the first year were HK\$ 730,400 and HK\$ 764,760, respectively. In subsequent years, the annual recurrent commercial benefits exceeded the annual recurrent costs HK\$ 530,400, giving a benefit-cost ratio of 0.32 (234,360/7,304,000), which suggested a likely payback period of 38 months. This factors in the high initial capital cost to establish a rooftop farm which includes building retrofitting costs and the purchase of equipment. Farm managers reported that the business stabilized after the second year and revenues were expected to increase in a long term.

However, the current amount of payment is based on a narrow view of farming participation (HK\$ 190 per month/person/half square meter). As suggested by the willingness to pay analysis, once participants took into account the social values derived from their farming activities, they might be willing to pay more (HK\$ 220). If fees were raised to this level, it would significantly alter and increase the gross benefits (to HK\$ 872,760 per year) and shorthorn the payback period (to 26 months). The results suggest that cost-benefit analysis provide a useful basis on which to reconceive the financial viability of the urban rooftop farms.

### **5. Discussion**

In Hong Kong, formal green initiatives in the urban area have come a long way from the development of public parks in the 1970s to the promotion of green roof designs through sustainable building directives in the 2000s. However urban rooftop farming has not been formally recognized and exists still within gray areas of urban planning legislation and building control.

As evidenced by these findings, the disparity of multifaceted social values aligns with previous literature on social capital theory. Cognitive values are directly related to the individuals in the society such as the effects of health and education improvement, while structure values are indirectly built through expanding network in society which needs more efforts to achieve. For instance, collective assets like the urban economy prosperity and social solidarity not only improved by mobilizing individuals through urban rooftop farming but also need more complex catalysts.

Different levels of understanding of social values have been identified within previous landscapes value research [37]. Individual perceived values in the landscape, concentrating on health and general wellbeing, have most readily been identified: collective values relating to spatial planning and resource management have been less mentioned by subjects. This disparity is also rooted in the physical nature of existing urban rooftop farming practices. According to observations made during this research, rooftop farming activity is explicitly individual due to space limitations. A large number of planting plots were arranged side by side within physically constrained roof spaces, inhibiting interaction. Participants work by themselves on individual plots while only "keeping an eye" on surrounding plots farmed by others. This mode of operation might explain the higher perception of direct personal health and education benefits. The lack of additional social space in social enterprise farms and the solitary nature of individual farms may reduce perceptions of collective social value such as engagement of the community or improvement of the urban environment.

Previous research has not explored the monetary influence of social benefits, which is required for urban rooftop farming to be incorporated into urban policymaking. For instance, on average the payback period for farms is shorter than for green roofs in Hong Kong (27 months) and for ground-level urban agriculture

**111**

**Acknowledgements**

**Appendices**

*Social Value of Urban Rooftop Farming: A Hong Kong Case Study*

projects (96 months) [25, 38]. The monetary influence of social values is likely to become amplified as urban density increased. Governments, as well as building owners, are likely to be more willing to invest in urban rooftop farming for both the

A shift in the thinking about the products of urban rooftop farming from food security and urban greening to social benefits and positive support to activate urban rooftop spaces would create significant opportunities for aligning individual motivations and state interests, thereby achieving a more sustainable city. Though current urban rooftop farming is undertaken by individuals and grassroots organizations, with limited policy or technical supports from city authorities, users still perceived considerable social benefits in the form of sustainable living, environmental knowledge and enhanced relationships within social groups. Users' willingness to pay for the experience indicates that urban rooftop farming is a passive social activity which can be enhanced by collaborative activities and by-products of farming which include talking, working side by side, standing and comparing. The implication of the multifaceted social values of rooftop farming suggests a changing perception of urban agriculture. With the increasing speed of urban densification, urban agriculture, constituted by complex social values and diverse interests from stakeholders, has the capacity to be a public good for cultural exchange and enhancing social coherence. This changing perception suggests the need for greater stakeholder support, recognition in legislation and integration with urban planning and building control processes. As an emerging urban activity, further studies are required. For instance, the higher preference for health and education as social benefits in this research requires more specific study to develop detailed instruments for those single indicators within particular groups. In addition, as this study only addressed the social values of urban rooftop farming in Hong Kong, further studies in different contexts and forms could help to expand the urban agriculture discourse.

The authors would like to thank the staffs from City Farm, Rooftop Republic Urban Farming as well as an anonymous friend for their generous assistance in the data collection of this research. This research received publication fund from the

1.2. How was your urban rooftop farm established? What kind of costs is

1.3. How does your farm operate on a daily basis? How many people did you hired and in what position? What kind of benefits can be earned in the urban rooftop farm? Can you give me the rough number about the benefits?

included in the farm? Can you give me the rough number about the cost?

University of Hong Kong Department of Architecture.

List of semi-structured interview questions:

1.1. When was your rooftop farm built?

economic benefit and social value through community sustainability.

*DOI: http://dx.doi.org/10.5772/intechopen.89279*

**6. Conclusion and further research**

projects (96 months) [25, 38]. The monetary influence of social values is likely to become amplified as urban density increased. Governments, as well as building owners, are likely to be more willing to invest in urban rooftop farming for both the economic benefit and social value through community sustainability.
