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The Effect of Air Pollution on Real-Estate Price in Tehran (in Persian)

Author

Listed:
  • Heidari Bahadori, Parham

    (Macro Systems Orientation, Institute for Management and Planning Studies, Tehran, Iran)

  • Hoseini, Mohammad

    (Institute for Management and Planning Studies, Tehran, Iran)

Abstract

This paper investigates the effect of air pollution on real-estate price in Tehran for the period (2013-14) and (2018-19). By combining microdata of real-estate transactions for more than 50,000 units that are traded multiple times during the period of study, the pollution index is constructed for each house by using the air pollution index from various stations in Tehran. Using this dataset, the effect of different pollutants on house prices is estimated. The findings show that particulate matter (PM2.5 index) decreases house prices in Tehran, such that one standard deviation increase in the PM2.5 index reduces house price by 3.1 percent. Moreover, there is no significant effect of NO2 and CO pollutants, which can be due to their unobservability in air, their trivial instant effect on health, and the insignificance of these pollutants in determining the final index.

Suggested Citation

  • Heidari Bahadori, Parham & Hoseini, Mohammad, 2022. "The Effect of Air Pollution on Real-Estate Price in Tehran (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 26(4), pages 3-33, March.
    • Handle: RePEc:auv:jipbud:v:26:y:2022:i:4:p:3-33
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    More about this item

    Keywords

    Air Pollution; House Price; Particulate Matter; Panel Data; Hedonic Pricing;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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