Pricing Behaviour and Non-Price Characteristics in the Airline Industry (J. Peoples, ed.), 2012, 3, pp. 275-295.
Federal Reserve Bank of St. Louis Working Paper No. 2009-058A
29 Pages Posted: 30 Nov 2009 Last revised: 8 Aug 2016
Date Written: August 16, 2010
Spatial heterogeneity of the determinants of airport noise is explored using houses sold near the Atlanta airport. Ordered probit locally weighted regressions (OPLWR) produce results substantively different than those using standard ordered probit. We find notable differences in the signs and magnitudes of the parameter estimates for different individual observations using OPLWR. For example, using a standard ordered probit model, the coefficient estimate for the connection between the percentage of neighborhood households headed by a Hispanic and noise is double the average of the OPLWR estimates. Moreover, while the standard ordered probit point estimate is positive, 37 percent of the estimates using OPLWR are negative. Even in relatively small areas, the OPLWR results imply that the standard ordered probit model can generate biased estimates due to ignored heterogeneity among individual houses.
Keywords: airport noise, spatial heterogeneity, ordered probit, locally weighted regression
JEL Classification: Q53, R41, C31
Suggested Citation: Suggested Citation
Cohen, Jeffrey P. and Coughlin, Cletus C., Where Does Noise Fall on People? Evidence from Atlanta (August 16, 2010). Pricing Behaviour and Non-Price Characteristics in the Airline Industry (J. Peoples, ed.), 2012, 3, pp. 275-295.; Federal Reserve Bank of St. Louis Working Paper No. 2009-058A. Available at SSRN: https://ssrn.com/abstract=1513365 or http://dx.doi.org/10.2139/ssrn.1513365