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Quasi-experimental evidence on the effect of aircraft noise on apartment rents


Boesch, Stefan; Nüesch, Stephan (2011). Quasi-experimental evidence on the effect of aircraft noise on apartment rents. Journal of Urban Economics, 69(2):196-204.

Abstract

Inferring the implicit price of an environmental good hinges on ceteris paribus conditions that are often hard to justify. This paper uses an unexpected change in flight regulations as source of exogenous variation and identifies aircraft noise effects from price adjustments in the market for rental apartments. Controlling for spatial and apartment heterogeneity, we find that aircraft noise reduces apartment rents by about 0.5% per decibel. Our results indicate (i) that noise discounts are overestimated in cross-sectional studies because aircraft noise tends to be negatively correlated with omitted neighborhood and housing amenities and (ii) that noise effects are unlikely to be constant over the entire noise range.

Abstract

Inferring the implicit price of an environmental good hinges on ceteris paribus conditions that are often hard to justify. This paper uses an unexpected change in flight regulations as source of exogenous variation and identifies aircraft noise effects from price adjustments in the market for rental apartments. Controlling for spatial and apartment heterogeneity, we find that aircraft noise reduces apartment rents by about 0.5% per decibel. Our results indicate (i) that noise discounts are overestimated in cross-sectional studies because aircraft noise tends to be negatively correlated with omitted neighborhood and housing amenities and (ii) that noise effects are unlikely to be constant over the entire noise range.

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Citations

8 citations in Web of Science®
9 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2011
Deposited On:16 Dec 2011 10:10
Last Modified:07 Dec 2017 10:22
Publisher:Elsevier
ISSN:0094-1190
Publisher DOI:https://doi.org/10.1016/j.jue.2010.09.007
Other Identification Number:merlin-id:3939

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