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Craft breweries and residential property values

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  • Yang Zhou
  • Neil Reid
  • Michael C. Carroll

Abstract

This paper studies the effect of craft breweries on residential property values. Using a hedonic Difference‐in‐Differences (DID) approach and about 250 thousand housing transactions in Denver, Colorado from 1990 to 2016, we investigate the impact of proximity to a craft brewery on residential property values. We consider three types of residence (single‐family home, row house, and condominiums), three types of brewery (all craft breweries, microbreweries, and brewpubs/taprooms), and two measurements of distance (Euclidian and walk‐time). Our most robust results are found for single‐family homes, whose values enjoy a premium of up to 20.4% for being in proximity to a brewpub/taproom several years after, with the average annual maximum premium around 3%. As expected, premiums decline as distance from breweries increase. Beyond a distance of 0.5 km or a 10‐min walk‐time, the premium for a regional/microbrewery is greater than that for a brewpub/taproom. For single family homes within 4 km or 40‐min walk‐time, the annualized premium ranges between 0.41% and 3.01%. These findings support the narrative that craft breweries are a neighborhood asset.

Suggested Citation

  • Yang Zhou & Neil Reid & Michael C. Carroll, 2024. "Craft breweries and residential property values," Growth and Change, Wiley Blackwell, vol. 55(1), March.
    • Handle: RePEc:bla:growch:v:55:y:2024:i:1:n:e12710
    DOI: 10.1111/grow.12710
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    References listed on IDEAS

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    1. Toro-Gonzalez, Daniel & McCluskey, Jill J. & Mittelhammer, Ron, 2014. "Beer Snobs Do Exist: Estimation of Beer Demand by Type," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-14.
    2. Neil Reid, 2021. "Craft Beer Tourism: The Search for Authenticity, Diversity, and Great Beer," Advances in Spatial Science, in: Mauro Ferrante & Oliver Fritz & Özge Öner (ed.), Regional Science Perspectives on Tourism and Hospitality, edition 1, pages 317-337, Springer.
    3. Isabelle Nilsson & Neil Reid, 2019. "The value of a craft brewery: On the relationship between craft breweries and property values," Growth and Change, Wiley Blackwell, vol. 50(2), pages 689-704, June.
    4. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
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