Does Noise Stationarity Matters on Spatial Formation of Real Estate Values? A GWR Analysis for Barcelona's Residential Market

"The noise has become a major environmental cost that contemporary societies pay for living in densely urbanized areas. The impact of this externality on quality of life is reflected in a decrease of householdís welfare level, and subsequently, in a reduction in property values. Using hedonic pricing (HP) a considerable number of studies have assessed the impact of noise on property markets, but few of them have considered the existence of submarkets. Theoretically it would be expectable that marginal value of 1 dB varies according to neighbourhoodís noise exposure, features of dwellings (e.g.: insulation level) and the annoyance experienced by its residents. In this paper, using GWR, which resolves spatial dependencies (i.e. spatial autocorrelation) at the same time that considers """"soft borders"""" among submarkets, it is studied the impact of noise on the value of a sample of multifamily dwellings at Barcelona. Analysis suggests that the level of noise does matters, although the NDSI found (0.08%) is in the bottom decile of HP studies reviewed by Navrud (2002). What is relevant is that the NDSI is not stationary throughout the city, suggesting that each dB have different impacts that seems to depend not only on the intensity to which dwellings are exposed, but also on the nature of noise source. Moreover, unlike other studies, in Barcelona WTP for a dB of ìpeace and quietnessî, coming from a contingent valuation study, is higher than the implicit price of noise arising from the research reported here."