Measuring the noise cost of aviation – the impact of the Limited Use Area around Warsaw Chopin Airport on property values

The interactions between air transport activities, airport location, local society and the regional economy are of great importance nowadays. Air traffic growth enhances the development of the economy and brings benefits to the users. On the other hand, there are some negative external effects and the costs are borne to great extent by the local community. Sustainable development requires all the effects caused by the provision of air services to be included in a comprehensive assessment of air transport activities. The aim of this study is to discuss the role of air transport as an instrument for sustainable development, investigate the external costs of aviation with particular emphasis on the effect of aviation noise on the local community and estimate to what degree this impact is stable over a period of time. The social cost of noise was evaluated through a complementary market, namely a change in the value of properties located in an area affected by airport activities. Therefore the impact of the Limited Use Area (LUA) related to aircraft noise associated with the operations of the largest airport in Poland, Warsaw Chopin Airport, on the housing prices in Warsaw was measured through the use of hedonic price modelling. Our estimates suggest that the impact of aviation noise on land-use policy has implications for the housing market. The location of a dwelling within the Limited Use Area around Warsaw Chopin Airport reduces its value by about 3%on average in the years 2011-2014, the NDI value being 0.6. According to the results of estimations the LUA variable for the years 2007-2009 was statistically insignificant.