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The Closing of a Major Airport: Immediate and Longer-Term Housing Market Effects

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Abstract

The closing of a busy airport has large effects on noise and economic activity. Using a unique dataset, we examine the effects of closing Denver’s Stapleton Airport on nearby housing markets. We find evidence of immediate anticipatory price effects upon announcement, but no price changes at closing and little evidence of upward trending prices between announcement and closing. However, after airport closure, more higher income and fewer black households moved into these locations, and developers built higher quality houses. Finally, post-closing, these demographic and housing stock changes had substantial effects on housing prices, even after restricting the sample to sales of pre-existing housing.

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  • 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.
    • Handle: RePEc:fip:fedlwp:86727
    DOI: 10.20955/wp.2020.001
    Note: Related professional presentation: Cohen, J., Coughlin, C. & Crews, J. (2018, January). Airport Noise and House Prices: Closing of One Airport and Opening of a New Airport in Denver. ASSA Meetings, Philadelphia, PA.
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    More about this item

    Keywords

    Airport noise; housing prices; airport closing; anticipatory effects; long-term effects; neighborhood change; dynamic price effects;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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