Does environmental noise affect housing rental prices in developing countries? Evidence from Ecuador

Manuel Zambrano-Monserrate and María Alejandra Ruano

Land Use Policy, 2019, vol. 87, issue C

Abstract: Environmental noise is defined as an unwanted sound which could be generated by anthropogenic activities (for instance industrial or commercial activities), the transit of engine vehicles and melodies at high volume. When these noises are played at the same time and during extended periods, they might cause health issues. As such, excessive environmental noise causes what is known as acoustic pollution. The effects of environmental noise on the housing rental price have been widely studied in developed countries; however, there are no similar studies in developing countries. The main reason for this is the lack of public information about environmental noise levels since the governments of turn have shown little interest in this type of data. On the other hand, measuring the level of noise is a complex and expensive procedure, which has prevented the researchers of the area from studying its effects. For this reason, following the technical recommendations of the Unified Text of the Secondary Legislation of the Ministry of Environment (TULSMA, for its acronym in Spanish), we gathered primary information about the level of environmental noise in Machala, one of the most important cities in Ecuador, which has experienced a great surge of economic growth in the last years. Our results show that per each unitary increment of the level of noise (dB) of the sector where the residence is located, its price diminishes on average in 1.97%. This result is useful for policymakers since the estimated economic value can be used as a reference to undertaking public projects destined to fight this problem. We also evidenced, that sectors with a higher level of noise are at downtown, reaching levels higher than 78 decibels (dB). This result is explained since at downtown the greatest commercial activity of the city is concentrated, as well as a great vehicular flow, where the drivers use excessively the car horn. Furthermore, the situation is aggravated due to the establishment of informal businesses in certain streets, which causes an increment in the noise level. We contribute to the literature evidencing that environmental noise is also a problem for developing countries; in addition, given the lack of information on noise levels in this type of countries, our research provides a clear and precise guide so that future research can raise noise data in other locations of interest.

Keywords: Environmental noise; Developing countries; Land use; Hedonic prices; Ecuador (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:87:y:2019:i:c:s0264837719304247

DOI: 10.1016/j.landusepol.2019.104059

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