Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices

32 Pages Posted: 16 Jul 2007

See all articles by Marco Salvi

Marco Salvi

Cantonal Bank of Zurich; Ecole Polytechnique Fédérale de Lausanne

Date Written: July 2007

Abstract

The paper applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. A hedonic model is specified with an error component accounting for spatial dependence. The paper takes a differentiated approach on the modelling of aircraft noise. We exploit a large database of geo-referenced noise measurements to investigate the reaction of prices to different noise metrics. The peculiar institutional setting of Zurich Airport, with changing patterns of runways configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of GIS-based location descriptors. The paper documents a moderate impact of airport noise on housing prices. In the base model specification the Noise Discount Index is 0.93% with typical discounts in the range of -2% to -8%. Accounting for the spatiality of the data has little effect on the estimated coefficients and their standard errors.

Keywords: Hedonic model, noise, airport noise, spatial statistics, Switzerland

JEL Classification: R31, C21, L93

Suggested Citation

Salvi, Marco, Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices (July 2007). Available at SSRN: https://ssrn.com/abstract=1000217 or http://dx.doi.org/10.2139/ssrn.1000217

Marco Salvi (Contact Author)

Cantonal Bank of Zurich ( email )

P.O. Box
Zurich CH-8010
Switzerland

Ecole Polytechnique Fédérale de Lausanne ( email )

CH-1015 Lausanne
Switzerland

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