Planes Overhead: How Airplane Noise Impacts Home Values

Florian Allroggen, R. John Hansman, Christopher Knittel, Jing Li, Xibo Wan and Juju Wang

No 34431, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Air transportation supports economic growth and global connectivity but imposes localized environmental costs, particularly through aircraft noise. We estimate the causal effect of aviation noise on housing prices using quasi-experimental variation from the Federal Aviation Administration's rollout of performance-based navigation (PBN) procedures and runway reconfigurations at three major U.S. airports. Combining high-resolution flight trajectory data with geocoded housing transactions, we apply a difference-in-differences hedonic framework to identify changes in exposure unanticipated by residents. A one-decibel increase in annual day-night average sound level reduces house prices by 0.6 to 1.0 percent. Among alternative noise metrics, average exposure explains property value impacts most strongly. Willingness to pay for quieter conditions varies systematically with income and race, indicating that aircraft noise externalities have meaningful distributional consequences. Our results highlight the need to incorporate localized environmental costs into aviation and urban land-use policy.

JEL-codes: L51 L62 L85 Q53 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-dcm, nep-env, nep-ind, nep-tre and nep-ure
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