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Spatial hedonic models of airport noise, proximity, and housing prices

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  • Jeffrey P. Cohen
  • Cletus C. Coughlin

Abstract

Despite the refrain that housing prices are determined by "location, location, and location," no prior studies of airport noise and housing prices have incorporated spatial econometric techniques. We compare various spatial econometric models and estimation methods in a hedonic price framework to examine the impact of noise on 2003 housing values near the Atlanta airport. Spatial effects are best captured by a model including both spatial autocorrelation and autoregressive parameters estimated by a generalized moments approach. The inclusion of spatial effects magnifies the negative price impacts of airport noise. Finally, after controlling for noise, houses farther from the airport tend to sell for less, implying that airport proximity is an amenity.

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Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2006-026.

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Date of creation: 2006
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Handle: RePEc:fip:fedlwp:2006-026

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  1. Won Kim, Chong & Phipps, Tim T. & Anselin, Luc, 2003. "Measuring the benefits of air quality improvement: a spatial hedonic approach," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 24-39, January.
  2. Jon P. Nelson, 2004. "Meta-Analysis of Airport Noise and Hedonic Property Values," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 38(1), pages 1-27, January.
  3. Dubin, Robin A., 1992. "Spatial autocorrelation and neighborhood quality," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 433-452, September.
  4. William M. Bowen, 2001. "Theoretical and Empirical Considerations Regarding Space in Hedonic Housing Price Model Applications," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 32(4), pages 466-490.
  5. Molly Espey, 2000. "The Impact of Airport Noise and Proximity on Residential Property Values," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 31(3), pages 408-419.
  6. McMillen, Daniel P., 2004. "Airport expansions and property values: the case of Chicago O'Hare Airport," Journal of Urban Economics, Elsevier, vol. 55(3), pages 627-640, May.
  7. Dubin, Robin A, 1988. "Estimation of Regression Coefficients in the Presence of Spatially Autocorrelated Error Terms," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 466-74, August.
  8. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
  9. Can, Ayse, 1992. "Specification and estimation of hedonic housing price models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 453-474, September.
  10. Jeffrey P. Cohen & Cletus C. Coughlin, 2008. "Airport-related noise, proximity, and housing prices in Atlanta," Working Papers 2005-060, Federal Reserve Bank of St. Louis.
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Cited by:
  1. Baylis, Katherine R. & Paulson, Nicholas D. & Piras, Gianfranco, 2011. "Spatial Approaches to Panel Data in Agricultural Economics: A Climate Change Application," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(03), August.
  2. Alexandre Repkine, 2008. "Measuring the Value of a Moscow Apartment A Spatial Approach to the Hedonic Pricing of Attributes," EERI Research Paper Series EERI_RP_2008_16, Economics and Econometrics Research Institute (EERI), Brussels.
  3. Tun-Hsiang Yu & Seong-Hoon Cho & Seung Kim, 2012. "Assessing the Residential Property Tax Revenue Impact of a Shopping Center," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 604-621, October.
  4. Lucia MEJIA-DORANTES & Odile HEDDEBAUT, 2012. "Land value appraisal in an area with a future tramway project in Lille, France," Post-Print hal-00986000, HAL.
  5. Alexander Razen & Wolfgang Brunauer & Nadja Klein & Thomas Kneib & Stefan Lang & Nikolaus Umlauf, 2014. "Statistical Risk Analysis for Real Estate Collateral Valuation using Bayesian Distributional and Quantile Regression," Working Papers 2014-12, Faculty of Economics and Statistics, University of Innsbruck.
  6. Matthew Chadourne & Seong-Hoon Cho & Roland Roberts, 2013. "Identifying priority target areas for the Knoxville–Knox County hillside and ridgetop protection plan: using the value of visual amenity during the real estate boom of 2002–2007 and the recession ," The Annals of Regional Science, Springer, vol. 50(3), pages 911-934, June.
  7. Giani Ionel Grădinaru & Ildiko Ioan, 2012. "Estimating the Impact of Landfill Proximity on the Value of Real Estate Goods," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 38-49, February.
  8. Johan Eyckmans & Simon De Jaeger & Sandra Rousseau, 2013. "Hedonic Valuation of Odor Nuisance Using Field Measurements: A Case Study of an Animal Waste Processing Facility in Flanders," Land Economics, University of Wisconsin Press, vol. 89(1), pages 53-75.
  9. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
  10. Dean Hanink & Robert Cromley & Avraham Ebenstein, 2012. "Spatial Variation in the Determinants of House Prices and Apartment Rents in China," The Journal of Real Estate Finance and Economics, Springer, vol. 45(2), pages 347-363, August.
  11. Marco Salvi, 2008. "Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(IV), pages 577-606, December.
  12. Kiku Ichihara & Jeffrey Cohen, 2011. "New York City property values: what is the impact of green roofs on rental pricing?," Letters in Spatial and Resource Sciences, Springer, vol. 4(1), pages 21-30, March.
  13. Thomas K. Bauer & Sebastian Braun & Michael Kvasnicka, 2013. "Distant Event, Local Effects? Fukushima and the German Housing Market," Ruhr Economic Papers 0433, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  14. Kelley Pace, R. & LeSage, James P., 2008. "A spatial Hausman test," Economics Letters, Elsevier, vol. 101(3), pages 282-284, December.
  15. Kuethe, Todd H. & Foster, Kenneth A. & Florax, Raymond J.G.M., 2008. "A Spatial Hedonic Model with Time-Varying Parameters: A New Method Using Flexible Least Squares," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6306, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  16. Andreas Mense & Konstantin Kholodilin, 2014. "Noise expectations and house prices: the reaction of property prices to an airport expansion," The Annals of Regional Science, Springer, vol. 52(3), pages 763-797, May.

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