Noise versus Access: The Impact of an Airport in an Urban Property Market

Abstract

The effects of a major airport are unlikely to exhibit a uniform spatial distribution. The benefits to industries and individual households may extend well beyond the local economy, whereas many of the costs are spatially concentrated in the immediate environment. In particular, the problems of noise and traffic generation can be expected to fall principally upon adjacent populations. This paper addresses the general question of whether the costs to local economies of airport proximity, which are in the nature of externalities, outweigh the benefits of access, employment and improved infrastructure. Based on data relating to Manchester airport and its surrounding areas, the specific approach adopted in the paper involves an investigation of the extent to which such proximity effects are capitalised into residential property prices. Our results provide some evidence to suggest that circumstances may exist where positive attributes, such as improved access and employment opportunities, may be more highly valued by local residents than the negative externality effects of airport proximity.