Abstract
The paper applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. We exploit a large database of geo-referenced noise measurements to investigate the reaction of prices to different noise metrics. The particular institutional setting of Zurich Airport, with changing patterns of runways configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of location descriptors. The paper documents the impact of airport noise on housing prices. In the base model specification the Noise Discount Index is 0.97% with typical discounts in the range of −2% to −8%. Accounting for the spatiality of the data has little effect on the results.
Highlights
The impact of airport proximity on neighboring communities is a hotly debated topic
As a consequence of land-use regulation, vacant adjacent land lots tend to be developed roughly at the same time. Houses built on these lots are likely to be similar, reflecting the supply and demand conditions prevalent at the time of development
Both noise measurements and house locations are available to us only up to a precision of ±100 meters, which limits the use of the Euclidean distance metric and favors an approach based on contiguity, as the nearest-neighbor metric
Summary
The impact of airport proximity on neighboring communities is a hotly debated topic. The positive aspects of proximity are related to the provision of communication links and to the direct economic importance of large airports. The downside of proximity are the adverse environmental effects primarily associated with aircraft noise. The growing interdependence and global connectivity of modern economies is bound to increase the economic importance of air travel. Environmental quality tends to be a superior good – as per capita income rises, the social demand for environmental quality increases more than proportionally. It is fair to say that airport noise is likely to fuel ongoing public debate
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