The Amenity Cost of Road Noise

95 Pages Posted: 19 Dec 2016

See all articles by Kathrine von Graevenitz

Kathrine von Graevenitz

ZEW – Leibniz Centre for European Economic Research

Date Written: December 15, 2016

Abstract

This article reports a complete two stage hedonic analysis for road noise. For the estimation of the hedonic price function I develop a spatial research design which simultaneously reduces the risk of omitted variable bias and the risk of measurement error in the noise measure. The preference parameters are identified following the approach developed in Bajari and Benkard (2005) by using a simple functional form for utility. Preferences are very heterogeneous and observable demographic characteristics explain 30 percent of the variation in taste for quiet. Results are used to discuss willingness to pay for noise reductions from two policy measures.

Keywords: Hedonic method, traffic noise, preferences, measurement error

JEL Classification: Q51, Q53, R23, R41, D12

Suggested Citation

von Graevenitz, Kathrine, The Amenity Cost of Road Noise (December 15, 2016). ZEW - Centre for European Economic Research Discussion Paper No. 16-087, Available at SSRN: https://ssrn.com/abstract=2887447 or http://dx.doi.org/10.2139/ssrn.2887447

Kathrine Von Graevenitz (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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