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The Impact of Industrial Sites on Residential Property Values

Author

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  • Friso de Vor

    (VU University Amsterdam)

  • Henri L.F. de Groot

    (VU University Amsterdam)

Abstract

This discussion paper resulted in a publication in 'Regional Studies' 45(5), 609-23. Industrial sites cause several negative externalities, such as traffic noise disturbance, congestion, and obstruction of view. In order to quantify the negative effects stemming from industrial sites, we estimate – using a hedonic pricing model – the impact of distance to industrial sites on residential property values. We use data on houses sold in the Randstad region and the province of Noord-Brabant (both located in the Netherlands) in the year 2005, together with data on characteristics of a substantial number of industrial sites in the same regions and period. The results reveal that the distance to an industrial site has a statistically significant negative effect on the value of residential properties. However, the effect is largely localized within a relatively short distance from the nearest industrial site. Furthermore, we obtain statistical evidence for substantial localized price differentials, which vary according to the size of an industrial site.

Suggested Citation

  • Friso de Vor & Henri L.F. de Groot, 0000. "The Impact of Industrial Sites on Residential Property Values," Tinbergen Institute Discussion Papers 09-035/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20090035
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    More about this item

    Keywords

    industrial sites; negative externalities; hedonic pricing;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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