Adjustments in the housing market after an environmental shock: evidence from a large-scale change in aircraft noise exposure

The impact of aircraft noise on housing is a much-debated topic. To meet the increasing demand for air transportation, airports seek to expand their capacities, but studies looking at market responses to a spatial redistribution of noise pollution are scarce. Using online advertisements of rental ap...

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Bibliographic Details
Published in:Oxford economic papers 2017-10, Vol.69 (4), p.918-938
Main Authors: Almer, Christian, Boes, Stefan, Nüesch, Stephan
Format: Article
Language:English
Subjects:
Adjustment
Advertisements
Aircraft
Airports
Apartments
Equilibrium
Housing market
Impact analysis
Noise
Noise exposure
Noise pollution
Online advertising
Quasi-experimental methods
Redistribution
Regulation
Rents
Tenants
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Summary:The impact of aircraft noise on housing is a much-debated topic. To meet the increasing demand for air transportation, airports seek to expand their capacities, but studies looking at market responses to a spatial redistribution of noise pollution are scarce. Using online advertisements of rental apartments around a large European airport (ZRH) and an unexpected change in flight regulations, we investigate the post-shock dynamics in apartment rents and tenants’search behaviour. We find that rents take about two years to stabilise to a new equilibrium value. After this period there is a constant markup (discount) for apartments exposed to less (more) aircraft noise. Moreover, the number of advertisement clicks as a proxy for search behaviour and information acquisition is significantly higher during the adjustment period. Our results have implications regarding the calculation of capitalisation effects in quasi-experimental hedonic valuations, which need to take into account off-equilibrium periods.
ISSN:0030-7653
1464-3812
DOI:10.1093/oep/gpw071