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Quasi-experimental evidence on the effect of aircraft noise on apartment rents

  • Boes, Stefan
  • Nüesch, Stephan

Inferring the implicit price of an environmental good hinges on ceteris paribus conditions that are often hard to justify. This paper uses an unexpected change in flight regulations as source of exogenous variation and identifies aircraft noise effects from price adjustments in the market for rental apartments. Controlling for spatial and apartment heterogeneity, we find that aircraft noise reduces apartment rents by about 0.5% per decibel. Our results indicate (i) that noise discounts are overestimated in cross-sectional studies because aircraft noise tends to be negatively correlated with omitted neighborhood and housing amenities and (ii) that noise effects are unlikely to be constant over the entire noise range.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 69 (2011)
Issue (Month): 2 (March)
Pages: 196-204

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Handle: RePEc:eee:juecon:v:69:y:2011:i:2:p:196-204
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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