Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure

36 Pages Posted: 13 Oct 2016

See all articles by Gabriel M. Ahlfeldt

Gabriel M. Ahlfeldt

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Volker Nitsch

Darmstadt University of Technology - Department of Law and Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Nicolai Wendland

Touro College

Date Written: August 23, 2016

Abstract

Many transport technologies cause a “not‐in‐my‐backyard” (NIMBY) reaction of locals in that they often oppose the nearby location of necessary infrastructure despite benefiting from greater mobility. We employ quasi‐experimental research methods to disentangle the offsetting noise and accessibility effects of one technology of mass transit, metro rail, analyzing land price effects of the opening of the first German electrified metro rail line in Berlin in 1902. Examining a long‐run micro‐geographic data set, we find that, ceteris paribus, a 1 km reduction in distance from the nearest station increases land prices (house prices) by 21% (5%), while a 10 db increase in noise depreciates land prices (house prices) by 5% (1%). We show that these effects are underestimated by 40% (access) to 80% (noise) if they are not estimated conditional on each other. A complementary analysis of recent property transactions data suggests that preferences for accessibility have remained quite stable over the 20th century, while noise sensitivity increased substantially. The case for constructing underground as opposed to elevated rail lines is therefore stronger today than a century ago.

Keywords: accessibility, noise, land price, difference-in-differences, regression discontinuity

JEL Classification: R120, R140, R410, N730, N740

Suggested Citation

Ahlfeldt, Gabriel M. and Nitsch, Volker and Wendland, Nicolai, Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure (August 23, 2016). CESifo Working Paper Series No. 6058, Available at SSRN: https://ssrn.com/abstract=2851720

Gabriel M. Ahlfeldt

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://personal.lse.ac.uk/ahlfeldg/

Volker Nitsch (Contact Author)

Darmstadt University of Technology - Department of Law and Economics ( email )

Marktplatz 15
Residenzschloss
Darmstadt, 64283
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Nicolai Wendland

Touro College ( email )

1602 Avenue J
New York, NY 10010
United States

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