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

Philipp Breidenbach, Jeffrey Cohen and Sandra Schaffner

Real Estate Economics, 2022, vol. 50, issue 6, 1548-1575

Abstract: Berlin‐Brandenburg airport (BER) became well‐known far beyond German borders due to substantial planning problems and multiple opening delays. Originally planned to open in March 2012, BER finally opened in 2020, after seven delay announcements. Focusing on the two most surprising and meaningful announcements, these unexpected delays form an exogeneous shock for residents surrounding the largest existing airport, Berlin‐Tegel, which was expected to close immediately upon opening of BER. We use these delay announcements as a quasi‐experiment to analyze separately the effects on apartment rental prices of aircraft noise (due to arriving/departing flight paths) and airport proximity (accessibility). The results suggest there is a negative effect of aircraft noise on rental prices of 2%–5%, while there are positive proximity effects from Berlin‐Tegel of 1%–3%. We consider heterogeneity using quantile regression and find the negative noise effects are larger for higher priced apartments. We disentangle aircraft noise and other (environmental) noise effects, and herein find that aircraft noise lowers property values by 2%–2.8%, while properties facing additional environmental noise experience a separate 1.7% decrease. In a joint model of noise and proximity, we observe the proximity benefits and the noise externalities essentially cancel each other out.

Date: 2022
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