Air pollution and the housing market: Evidence from Germany's Low Emission Zones

Henri Gruhl, Nicolas Volkhausen, Nico Pestel and Nils aus dem Moore

No 977, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper studies whether people's perception of improvements in local air quality are reflected in the housing market based on comprehensive data on real estate prices from Germany. Using a quasi-experimental research design, we exploit the staggered introduction of Low Emission Zones (LEZs) across German cities, lowering urban air pollution by limiting the access of high-emitting vehicles. We find that residents value the presence of LEZs, reflected by roughly 2% higher apartment rents. Estimates are similar, albeit smaller in magnitude, for properties for purchase. The results are driven by earlier LEZ implementations and LEZs in areas with relatively higher pre-intervention pollution levels.

Keywords: Low emission zone; policy evaluation; house prices; externalities (search for similar items in EconPapers)
JEL-codes: I18 Q51 R21 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:977

DOI: 10.4419/96973142

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