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Adjustments in the housing market after an environmental shock: evidence from a large-scale change in aircraft noise exposure

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  • Christian Almer
  • Stefan Boes
  • Stephan Nüesch

Abstract

The impact of aircraft noise on housing is a much-debated topic. To meet the increasing demand for air transportation, airports seek to expand their capacities, but studies looking at market responses to a spatial redistribution of noise pollution are scarce. Using online advertisements of rental apartments around a large European airport (ZRH) and an unexpected change in flight regulations, we investigate the post-shock dynamics in apartment rents and tenants’ search behaviour. We find that rents take about two years to stabilise to a new equilibrium value. After this period there is a constant markup (discount) for apartments exposed to less (more) aircraft noise. Moreover, the number of advertisement clicks as a proxy for search behaviour and information acquisition is significantly higher during the adjustment period. Our results have implications regarding the calculation of capitalisation effects in quasi-experimental hedonic valuations, which need to take into account off-equilibrium periods.

Suggested Citation

  • Christian Almer & Stefan Boes & Stephan Nüesch, 2017. "Adjustments in the housing market after an environmental shock: evidence from a large-scale change in aircraft noise exposure," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 918-938.
  • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:4:p:918-938.
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    Cited by:

    1. Lindgren, Samuel, 2018. "Traffic Noise and Housing Values: Evidence from an Airport Concession Renewal," Working papers in Transport Economics 2018:15, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 26 Feb 2019.
    2. Jeffrey P. Cohen & Cletus C. Coughlin & Jonas C. Crews & Stephen L. Ross, 2020. "The Closing of a Major Airport: Immediate and Longer-Term Housing Market Effects," Working Papers 2020-001, Federal Reserve Bank of St. Louis, revised 19 Jan 2021.
    3. Jeffrey P. Cohen & Cletus C. Coughlin & Jonas C. Crews & Stephen L. Ross, 2019. "Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets," Working Papers 2019-27, Federal Reserve Bank of St. Louis.

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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