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Does Tourism Affect House Prices? Evidence from Italy

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  • Bianca Biagi
  • Maria G. Brandano
  • Dionysia Lambiri

Abstract

The purpose of the present work is to analyze whether—and to what extent—tourism activity affects urban house price dynamics in Italy. Using a system Generalized Method of Moments (GMM-SYS) approach and after controlling for socioeconomic characteristics of the local housing markets as well as amenities and disamenities, we test for the effect of tourism by employing a composite index that enables us to capture the complexity of the tourism market. Data consist of yearly observations on the average house prices of 103 Italian cities over the period of 1996–2007. The results confirmed by several robustness checks demonstrate that tourism activity positively affects house prices. In addition, this work provides several first hints that this relationship might not be the same for all types of cities; hence, further developments of the present work should proceed in the direction of searching for different potential regimes through the use of mixture models.

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  • Bianca Biagi & Maria G. Brandano & Dionysia Lambiri, 2015. "Does Tourism Affect House Prices? Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 46(3), pages 501-528, September.
  • Handle: RePEc:bla:growch:v:46:y:2015:i:3:p:501-528
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    2. Joaquín Delgado & Giovanni Wences, 2020. "A hedonic approach to the valuation of the effect of criminal violence on housing prices in Acapulco City," Empirical Economics, Springer, vol. 59(6), pages 2999-3018, December.
    3. Mikulić, Josip & Vizek, Maruška & Stojčić, Nebojša & Payne, James E. & Čeh Časni, Anita & Barbić, Tajana, 2021. "The effect of tourism activity on housing affordability," Annals of Tourism Research, Elsevier, vol. 90(C).
    4. Bianca Biagi & Maria Giovanna Brandano & Steven B. Caudill, 2016. "Tourism and house prices in Italy," Tourism Economics, , vol. 22(5), pages 964-978, October.
    5. Gu, Xinhua & Li, Guoqiang & Chang, Xiao & Guo, Haizhen, 2017. "Casino tourism, economic inequality, and housing bubbles," Tourism Management, Elsevier, vol. 62(C), pages 253-263.
    6. Stefania Środa-Murawska & Elżbieta Grzelak-Kostulska & Jadwiga Biegańska & Leszek S. Dąbrowski, 2021. "Culture and Sustainable Tourism: Does the Pair Pay in Medium-Sized Cities?," Sustainability, MDPI, Open Access Journal, vol. 13(16), pages 1-26, August.
    7. Yan Liu & Linchuan Yang & Kwong Wing Chau, 2020. "Impacts of Tourism Demand on Retail Property Prices in a Shopping Destination," Sustainability, MDPI, Open Access Journal, vol. 12(4), pages 1-14, February.
    8. Enrico Conti & Laura Grassini & Catia Monicolini, 2020. "Tourism competitiveness of Italian municipalities," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(5), pages 1745-1767, December.
    9. Emanuele Breda & Giacomo Oddo, 2019. "The determinants of foreign tourism demand: separating elasticities for the extensive and the intensive margin," Questioni di Economia e Finanza (Occasional Papers) 482, Bank of Italy, Economic Research and International Relations Area.
    10. Biagi, Bianca & Brandano, Maria Giovanna & Ortega-Argiles, Raquel, 2021. "Smart specialisation and tourism: Understanding the priority choices in EU regions," Socio-Economic Planning Sciences, Elsevier, vol. 74(C).
    11. Zhao, Qingbin & Li, Guoqiang & Gu, Xinhua & Lei, Chun Kwok, 2021. "Inequality hikes, saving surges, and housing bubbles," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 349-363.
    12. Delphine Guex, Olivier Crevoisier, 2017. "Post-industrial globalization and local milieus: A typology," Diskussionsschriften credresearchpaper15, Universitaet Bern, Departement Volkswirtschaft - CRED.
    13. Çigdem Karis & Derya Altintas, 2021. "Tourism’s Effect on the Housing Prices in Turkey: The ARDL Bound Testing Approach," Bingol University Journal of Economics and Administrative Sciences, Bingol University, Faculty of Economics and Administrative Sciences, vol. 5(1), pages 249-276, August.
    14. Mikulić, Josip & Vizek, Maruška & Stojčić, Nebojša & Payne, James E. & Čeh Časni, Anita & Barbić, Tajana, 2021. "The effect of tourism activity on housing affordability," Annals of Tourism Research, Elsevier, vol. 90(C).

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