Spatial Hedonic Models of Airport Noise, Proximity, and Housing Prices
Jeffrey P. Cohen
University of Connecticut, School of Business and Center for Real Estate
Cletus C. Coughlin
Federal Reserve Bank of St. Louis - Research Division
FRB of St. Louis Working Paper No. 2006-026C
Despite the refrain that housing prices are determined by "location, location, and location," no prior studies of airport noise and housing prices have incorporated spatial econometric techniques. We compare various spatial econometric models and estimation methods in a hedonic price framework to examine the impact of noise on 2003 housing values near the Atlanta airport. Spatial effects are best captured by a model including both spatial autocorrelation and autoregressive parameters estimated by a generalized moments approach. The inclusion of spatial effects magnifies the negative price impacts of airport noise. Finally, after controlling for noise, houses farther from the airport tend to sell for less, implying that airport proximity is an amenity.
Number of Pages in PDF File: 34
Keywords: noise, airports, housing prices, hedonic pricing, spatial econometrics
JEL Classification: Q53, Q51, R31, L93, C21
Date posted: April 27, 2006
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