Is there a diminishing willingness to pay for consumption amenities as a result of the Covid-19 pandemic?

Abstract

We employ the Covid-19 pandemic as an unanticipated event in order to investigate the willingness to pay for consumption amenities such as restaurants, cinemas and theaters. We use a hedonic pricing model in combination with a time-gradient difference-in-difference approach. Our data set contains virtually all apartments for sale in the larger Stockholm area. We use a very detailed and flexible definition of the density of consumption amenities based on the exact location of these amenities and the walking distance from the apartments to these amenities. Although there are differences between specifications, we find a decrease of 3.9 percent of apartments that we label as amenity rich. Based on the average apartment price, this equals a drop of 195,240 Swedish Kronor (or almost 22,000 US dollars).