The influence of noise on net revenue and values of investment properties: Evidence from Switzerland
In this study we use hedonic models to measure the influence of noise nuisance on rents, costs and values of investment properties in Switzerland. Countrywide data is provided by institutional real estate investors. The effects are measured for aircraft noise, road traffic noise and railroad noise. We show that negative effects appear between lower and upper tresholds which vary between different noise types and across residential and non-residential properties. Rents, costs and values are affected below the administrative tresholds given by the LSV and the negative impact ceases at an upper threshold. However high noise nuisance might influence investment decisions, i.e. offices are built instead of housing etc. These important effects are not given account in the data. In addition, directly measured reductions on market values are lower than the expected reductions based on empirical effects on rents and costs. The reasons for the different market value reductions may be found in the Swiss tenancy law. Rents for dwellings within existing rental agreements can only be adjusted in accordance with the change of the “reference interest rate” (Referenzzinssatz) and the CPI. The analysis shows that the average contract duration is dependent on the noise nuisance, which leads to a significant reduction of noise-induced losses within periods of increasing market rents.
|Date of creation:||Jan 2015|
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- Andrea Baranzini & JosÃ© V. Ramirez, 2005. "Paying for Quietness: The Impact of Noise on Geneva Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(4), pages 633-646, April.
- Brett Day & Ian Bateman & Iain Lake, 2007. "Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 211-232, May.
- Dekkers, Jasper E.C. & van der Straaten, J. Willemijn, 2009. "Monetary valuation of aircraft noise: A hedonic analysis around Amsterdam airport," Ecological Economics, Elsevier, vol. 68(11), pages 2850-2858, September.
- Stefan Sebastian Fahrländer, 2006.
"Semiparametric Construction of Spatial Generalized Hedonic Models for Private Properties,"
Swiss Journal of Economics and Statistics (SJES),
Swiss Society of Economics and Statistics (SSES), vol. 142(IV), pages 501-528, December.
- Stefan Sebastian Fahrlaender, 2005. "Semiparametric Construction of Spatial Generalized Hedonic Models for Private Properties," Diskussionsschriften dp0507, Universitaet Bern, Departement Volkswirtschaft.
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