IDEAS home Printed from https://ideas.repec.org/a/eee/jeeman/v132y2025ics0095069625000452.html
   My bibliography  Save this article

Air pollution and the housing market: Evidence from Germany’s Low Emission Zones

Author

Listed:
  • Gruhl, Henri
  • Volkhausen, Nicolas
  • Pestel, Nico
  • aus dem Moore, Nils

Abstract

This paper studies whether air quality improvements from driving restrictions are valued in the housing market, using comprehensive data on real estate prices in Germany. For identification, we exploit the staggered introduction of Low Emission Zones (LEZs) across German cities, restricting inner-city access for emission-intensive vehicles. We find that air quality improvements are reflected by roughly 2 percent higher apartment rents. The results are primarily driven by earlier LEZ implementations in areas with relatively higher pre-intervention pollution levels and in areas less dependent on cars. Our findings have important implications for planned changes to the emission intensity of the vehicle fleet, underscoring the potential implications of transitioning to cleaner transportation systems.

Suggested Citation

  • Gruhl, Henri & Volkhausen, Nicolas & Pestel, Nico & aus dem Moore, Nils, 2025. "Air pollution and the housing market: Evidence from Germany’s Low Emission Zones," Journal of Environmental Economics and Management, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:jeeman:v:132:y:2025:i:c:s0095069625000452
    DOI: 10.1016/j.jeem.2025.103161
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0095069625000452
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jeem.2025.103161?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Low emission zone; Policy evaluation; House prices; Externalities;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:132:y:2025:i:c:s0095069625000452. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622870 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.