IDEAS home Printed from https://ideas.repec.org/p/zbw/rwirep/822.html
   My bibliography  Save this paper

Continuation of air services at Berlin-Tegel and its effects on rental prices

Author

Listed:
  • Breidenbach, Philipp
  • Cohen, Jeffrey P.
  • Schaffner, Sandra

Abstract

Berlin-Brandenburg airport (BER) has become well-known far beyond German borders due to substantial mis-planning and heavy delays in opening. Planned to open in March 2012 and to take over all air-transport services from Germany's capital city, with the other airports expected to close, construction work at BER is still ongoing in 2019. Four weeks before the expected opening of the airport, the opening was suddenly delayed by several months. This unexpected delay was an exogeneous shock for residents surrounding the largest existing airport, Berlin-Tegel, which is expected to close upon the opening of Berlin-Brandenburg. A series of additional delay announcements followed. We analyze the effect of airport noise and proximity to the airport on housing rental prices. Our identification strategy is based on the expectations regarding the closing of Berlin-Tegel airport. The results suggest that there is a negative effect of noise on housing rental prices while there are positive effects of proximity to Berlin-Tegel. These delays reduce rental prices by a small amount, when compared with the noise discounts in the literature for owner-occupied properties in studies of other cities. These findings likely occur because renters have a relatively short time horizon for their tenure in an apartment, on average, to benefit from the future noise reduction. For instance, a one-year delay for a renter who plans to stay in an apartment for only one or two years implies a very low benefit from the future noise reduction. We also find that the benefits from a delay announcement have a net negative effect on prices for rental properties that are in the noisier areas but further drive time from Tegel; and a net positive effect in the less noisy areas that are shorter drive time from Tegel. This likely re flects the disamenity from prolonged airport noise exposure, as well as the benefits from proximity due to expectation of continued ease of employment and travel access.

Suggested Citation

  • Breidenbach, Philipp & Cohen, Jeffrey P. & Schaffner, Sandra, 2019. "Continuation of air services at Berlin-Tegel and its effects on rental prices," Ruhr Economic Papers 822, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:822
    DOI: 10.4419/86788953
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/209585/1/1685717942.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.4419/86788953?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ahlfeldt, Gabriel M. & Maennig, Wolfgang, 2015. "Homevoters vs. leasevoters: A spatial analysis of airport effects," Journal of Urban Economics, Elsevier, vol. 87(C), pages 85-99.
    2. Cohen, Jeffrey P. & Coughlin, Cletus C. & Crews, Jonas, 2019. "Traffic noise in Georgia: Sound levels and inequality," Journal of Housing Economics, Elsevier, vol. 44(C), pages 150-165.
    3. Andreas Mense & Konstantin Kholodilin, 2014. "Noise expectations and house prices: the reaction of property prices to an airport expansion," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 763-797, May.
    4. Jan K. Brueckner, 2003. "Airline Traffic and Urban Economic Development," Urban Studies, Urban Studies Journal Limited, vol. 40(8), pages 1455-1469, July.
    5. J. Tomkins & N. Topham & J. Twomey & R. Ward, 1998. "Noise versus Access: The Impact of an Airport in an Urban Property Market," Urban Studies, Urban Studies Journal Limited, vol. 35(2), pages 243-258, February.
    6. G. Jud & Daniel Winkler, 2006. "The Announcement Effect of an Airport Expansion on Housing Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 33(2), pages 91-103, September.
    7. Cliff Lipscomb, 2003. "Small Cities Matter, Too: The Impacts of an Airport and Local Infrastructure on Housing Prices in a Small Urban City," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 15(3), pages 255-273, November.
    8. Jeffrey P. Cohen & Cletus C. Coughlin, 2008. "Spatial Hedonic Models Of Airport Noise, Proximity, And Housing Prices," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 859-878, December.
    9. Breidenbach, Philipp, 2015. "Ready for Take-off? The Economic Effects of Regional Airport Expansion," Ruhr Economic Papers 549, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Gabriel M. Ahlfeldt & Wolfgang Maennig, 2013. "External Productivity and Utility Effects of City Airports," Regional Studies, Taylor & Francis Journals, vol. 47(4), pages 508-529, April.
    11. Jon P. Nelson, 2004. "Meta-Analysis of Airport Noise and Hedonic Property Values," Journal of Transport Economics and Policy, University of Bath, vol. 38(1), pages 1-27, January.
    12. Molly Espey & Hilary Lopez, 2000. "The Impact of Airport Noise and Proximity on Residential Property Values," Growth and Change, Wiley Blackwell, vol. 31(3), pages 408-419.
    13. Boes, Stefan & Nüesch, Stephan, 2011. "Quasi-experimental evidence on the effect of aircraft noise on apartment rents," Journal of Urban Economics, Elsevier, vol. 69(2), pages 196-204, March.
    14. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2007. "The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 161-180, August.
    15. Andrea Baranzini & José 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.
    16. Lucas W. Davis, 2011. "The Effect of Power Plants on Local Housing Values and Rents," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1391-1402, November.
    17. Jeffrey P. Cohen & Cletus C. Coughlin, 2009. "Changing Noise Levels and Housing Prices Near the Atlanta Airport," Growth and Change, Wiley Blackwell, vol. 40(2), pages 287-313, June.
    18. Breidenbach Philipp & Eilers Lea, 2018. "RWI-GEO-GRID: Socio-economic data on grid level," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(6), pages 609-616, October.
    19. Gabriel M. Ahlfeldt & Wolfgang Maennig, 2010. "Substitutability and Complementarity of Urban Amenities: External Effects of Built Heritage in Berlin," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(2), pages 285-323, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schaffner, Sandra & Breidenbach, Philipp & Cohen, Jeffrey P., 2019. "Continuation of air-services in Berlin-Tegel and its effects on housing prices," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203623, Verein für Socialpolitik / German Economic Association.
    2. Philipp Breidenbach & Jeffrey Cohen & Sandra Schaffner, 2022. "Continuation of air services at Berlin‐Tegel and its effects on apartment rental prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(6), pages 1548-1575, November.
    3. Breidenbach, Philipp & Thiel, Patrick, 2023. "Housing Prices, Airport Noise and an Unforeseeable Event of Silence," Ruhr Economic Papers 1020, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Andreas Mense & Konstantin Kholodilin, 2014. "Noise expectations and house prices: the reaction of property prices to an airport expansion," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 763-797, May.
    5. Thiel, Patrick, 2022. "Evaluation of railroad noise: The proximity to railroads and its effect on house prices," Ruhr Economic Papers 981, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Wai Hong Kan Tsui & David Tat Wei Tan & Song Shi, 2017. "Impacts of airport traffic volumes on house prices of New Zealand’s major regions: A panel data approach," Urban Studies, Urban Studies Journal Limited, vol. 54(12), pages 2800-2817, September.
    7. 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.
    8. Radoslaw Trojanek & Justyna Tanas & Saulius Raslanas & Audrius Banaitis, 2017. "The Impact of Aircraft Noise on Housing Prices in Poznan," Sustainability, MDPI, vol. 9(11), pages 1-16, November.
    9. Jacek Batóg & Iwona Foryś & Radosław Gaca & Michał Głuszak & Jan Konowalczuk, 2019. "Investigating the Impact of Airport Noise and Land Use Restrictions on House Prices: Evidence from Selected Regional Airports in Poland," Sustainability, MDPI, vol. 11(2), pages 1-18, January.
    10. Christian Almer & Stefan Boes & Stephan Nüesch, 2017. "Adjustments in the housing market after an environmental shock: evidence from a large-scale change in aircraft noise exposure," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 918-938.
    11. Jeffrey P. Cohen & Cletus C. Coughlin, 2009. "Changing Noise Levels and Housing Prices Near the Atlanta Airport," Growth and Change, Wiley Blackwell, vol. 40(2), pages 287-313, June.
    12. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
    13. Jeffrey P. Cohen & Cletus C. Coughlin & Jonas C. Crews & Stephen L. Ross, 2019. "Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets," Working Papers 2019-27, Federal Reserve Bank of St. Louis.
    14. Zheng, Xian & Peng, Wenwei & Hu, Mingzhi, 2020. "Airport noise and house prices: A quasi-experimental design study," Land Use Policy, Elsevier, vol. 90(C).
    15. Doerr, Luisa & Dorn, Florian & Gaebler, Stefanie & Potrafke, Niklas, 2020. "How new airport infrastructure promotes tourism: evidence from a synthetic control approach in German regions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(10), pages 1402-1412.
    16. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    17. Jeffrey P. Cohen & Cletus C. Coughlin, 2008. "Spatial Hedonic Models Of Airport Noise, Proximity, And Housing Prices," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 859-878, December.
    18. Efthymiou, D. & Antoniou, C., 2015. "Investigating the impact of recession on transportation cost capitalization: a spatial analysis," Journal of Transport Geography, Elsevier, vol. 42(C), pages 1-9.
    19. G. Jud & Daniel Winkler, 2006. "The Announcement Effect of an Airport Expansion on Housing Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 33(2), pages 91-103, September.
    20. Hyun, Dongwoo & Milcheva, Stanimira, 2019. "Spatio-temporal effects of an urban development announcement and its cancellation on house prices: A quasi-natural experiment," Journal of Housing Economics, Elsevier, vol. 43(C), pages 23-36.

    More about this item

    Keywords

    real estate prices; airports; aviation noise; proximity; Germany;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:rwirep:822. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/rwiesde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.