Planes, Trains, and Automobiles: The Impact of Traffic Noise on House Prices

Because of large planned infrastructural projects like expansion of the main airport and construction of high-speed railways, noise nuisance has become a national social topic in the Netherlands. Moreover, according to EU-guidelines, determination and enforcement of differentiated noise limits will be delegated from national to local governments in the near future. The value of noise has never been this important. In this paper, we estimate the non-linear impact of traffic noise on property prices. The used data set is very extensive; over 100,000 sales transactions are studied, with many individual property characteristics, combined with noise levels for 2 million small 100 by 100 m areas. We use spatial autocorrelation techniques to overcome the regular problems of traditional NIMBY-analysis performed by hedonic regression. In a rising market, we find that the impact of traffic noise ranges to 12 percent, with an average of about 5 percent. The discount varies across sub-markets, and is a non-linear function of the noise level.

[1]  Jon P. Nelson,et al.  Three Mile Island and residential property values: empirical analysis and policy implications , 1981 .

[2]  J. Hausman,et al.  Contingent Valuation: Is Some Number Better than No Number? , 1994 .

[3]  David S. Brookshire,et al.  Valuing Public Goods: A Comparison of Survey and Hedonic Approaches , 1982 .

[4]  Raymond B Palmquist.  IMPACT OF HIGHWAY IMPROVEMENTS ON PROPERTY VALUES IN WASHINGTON STATE , 1982 .

[5]  Jon P. Nelson,et al.  HIGHWAY NOISE AND PROPERTY VALUES. A SURVEY OF RECENT EVIDENCE , 1982 .

[6]  Otis W. Gilley,et al.  Using the Spatial Configuration of the Data to Improve Estimation , 1997 .

[7]  N. Soguel,et al.  Valuing damage to historic buildings using a contingent market: a case study of road traffic externalities , 1994 .

[8]  H. Miedema,et al.  Annoyance from transportation noise: relationships with exposure metrics DNL and DENL and their confidence intervals. , 2001, Environmental health perspectives.

[9]  James P. LeSage,et al.  Spatial Statistics and Real Estate , 2004 .

[10]  Carol Mansfield,et al.  Buying Time: Real and Hypothetical Offers , 1996 .

[11]  Daniel P. McMillen.  House prices and the proposed expansion of Chicago's O'Hare Airport , 2004 .

[12]  R. Dubin,et al.  Spatial Autocorrelation: A Primer , 1998 .

[13]  Mats Wilhelmsson,et al.  The Impact of Traffic Noise on the Values of Single-family Houses , 2000 .

[14]  J. Payne,et al.  How People Respond to Contingent Valuation Questions: A Verbal Protocol Analysis of Willingness to Pay for an Environmental Regulation , 1994 .

[15]  R. Dubin.  Estimation of Regression Coefficients in the Presence of Spatially Autocorrelated Error Terms , 1988 .

[16]  Raymond B. Palmquist.  Measuring environmental effects on property values without hedonic regressions , 1982 .

[17]  C. F. Sirmans,et al.  TRAFFIC EXTERNALITIES AND SINGLE-FAMILY HOUSE PRICES. , 1992 .

[18]  B. Baarsma.  Monetary valuation of environmental goods: alternatives to contingent valuation , 2000 .

[19]  T. Levesque,et al.  MODELLING THE EFFECTS OF AIRPORT NOISE ON RESIDENTIAL HOUSING MARKETS: A CASE STUDY OF WINNIPEG INTERNATIONAL AIRPORT. , 1994 .

[20]  K. Sælensminde,et al.  Stated choice valuation of urban traffic air pollution and noise , 1999 .

[21]  Jon P. Nelson,et al.  Economic Analysis of Transportation Noise Abatement , 1978 .

[22]  I. Bateman,et al.  The Effect of Road Traffic on Residential Property Values: A Literature Review and Hedonic Pricing Study , 2006 .

[23]  Larry C. L. Poon.  Railway Externalities and Residential Property Prices , 1978 .

[24]  S. Hamilton,et al.  DENSITY OF RESIDENTIAL LAND-USE AND THE IMPACT OF AIRPORT NOISE , 1991 .

[25]  Raymond B. Palmquist,et al.  Environmental Conditions, Reservation Prices, and Time on the Market for Housing , 2001 .