Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices

The paper applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. A hedonic model is specified with an error component accounting for spatial dependence. The paper takes a differentiated approach on the modelling of aircraft noise. We exploit a large database of geo-referenced noise measurements to investigate the reaction of prices to different noise metrics. The peculiar institutional setting of Zurich Airport, with changing patterns of runways configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of GIS-based location descriptors. The paper documents a moderate impact of airport noise on housing prices. In the base model specification the Noise Discount Index is 0.93% with typical discounts in the range of -2% to -8%. Accounting for the spatiality of the data has little effect on the estimated coefficients and their standard errors