The Impact of Industrial Sites on Residential Property Values
AbstractThis discussion paper resulted in a publication in 'Regional Studies' 45(5), 609-23. Industrial sites cause several negative externalities, such as traffic noise disturbance, congestion, and obstruction of view. In order to quantify the negative effects stemming from industrial sites, we estimate – using a hedonic pricing model – the impact of distance to industrial sites on residential property values. We use data on houses sold in the Randstad region and the province of Noord-Brabant (both located in the Netherlands) in the year 2005, together with data on characteristics of a substantial number of industrial sites in the same regions and period. The results reveal that the distance to an industrial site has a statistically significant negative effect on the value of residential properties. However, the effect is largely localized within a relatively short distance from the nearest industrial site. Furthermore, we obtain statistical evidence for substantial localized price differentials, which vary according to the size of an industrial site.
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industrial sites; negative externalities; hedonic pricing;
Find related papers by JEL classification:
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
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