Proximity to kindergarten: valuable to be close, but not too close

Children have to be brought to kindergarten every day, implying monetary traveling costs as well as time costs. For households with young children, proximity to a kindergarten is therefore likely to be a highly valued locational attribute. Hence, we expect that the distance from a house to the closest kindergarten will have an impact on the price for which the house can be sold. We use a sample from a Norwegian town for examining the relationship between house prices and distance to kindergarten. The results from estimating a hedonic model show that house prices are higher the closer they are located to a kindergarten. If the distance to a kindergarten is less than 50 meters, however, house prices drop abruptly to a level lower than for houses between 100 and 1000 meters from the kindergarten. We interpret this as the result of negative externalities associated with noise and traffic generated by the kindergarten.We use a sample from a Norwegian town for examining the relationship between house prices and distance to kindergarten. The results from estimating a hedonic model show that house prices are higher the closer they are located to a kindergarten. If the distance to a kindergarten is less than 50 meters, however, house prices drop abruptly to a level lower than for houses between 100 and 1000 meters from the kindergarten. We interpret this as the result of negative externalities associated with noise and traffic generated by the kindergarten.