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Housing prices, airport noise and an unforeseeable event of silence

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  • Breidenbach, Philipp
  • Thiel, Patrick

Abstract

To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations showing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local factors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.

Suggested Citation

  • Breidenbach, Philipp & Thiel, Patrick, 2024. "Housing prices, airport noise and an unforeseeable event of silence," Journal of Housing Economics, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:jhouse:v:66:y:2024:i:c:s1051137724000457
    DOI: 10.1016/j.jhe.2024.102026
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    More about this item

    Keywords

    Covid pandemic; Aircraft noise; Housing prices; Hedonic function;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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