Housing prices, airport noise and an unforeseeable event of silence

Philipp Breidenbach and Patrick Thiel

Journal of Housing Economics, 2024, vol. 66, issue C

Abstract: To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations showing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local factors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.

Keywords: Covid pandemic; Aircraft noise; Housing prices; Hedonic function (search for similar items in EconPapers)
JEL-codes: O18 Q53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:66:y:2024:i:c:s1051137724000457

DOI: 10.1016/j.jhe.2024.102026

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