Form or function?: the effect of new sports stadia on property prices in London

Gabriel Ahlfeldt and Georgios Kavetsos

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Professional sports facilities are among the most expensive development projects. Assessing the external effects related to these and the channels through which these effects operate is a challenging task. We propose a strategy to value the external effects stadia deliver to their neighbourhoods based on the variation of property prices. Our strategy allows for unobserved spatial heterogeneity, anticipation effects, and disentangles the stadium’s function as a sports facility from its form as a physical structure that (visually) dominates the neighbourhood. We apply this strategy to two of the largest stadium projects of the recent decade, the New Wembley and the Emirates Stadium in London. Our results suggest there are positive stadium effects on property prices, which are large compared to construction costs. Notable anticipation effects are found immediately following the announcement of the stadium plans. We further argue that stadium architecture plays a role in promoting positive spillovers to the neighbourhood.

Keywords: neighbourhood amenities; property prices; sport; stadium impact (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Date: 2014-01-07
New Economics Papers: this item is included in nep-ppm, nep-spo and nep-ure
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Citations: View citations in EconPapers (53)

Published in Journal of the Royal Statistical Society. Series A: Statistics in Society, 7, January, 2014, 177(1), pp. 169-190. ISSN: 0964-1998

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Journal Article: Form or function?: the effect of new sports stadia on property prices in London (2014)
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