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Does Tourism Affect House Prices? Evidence from Italy

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  • Bianca Biagi
  • Maria G. Brandano
  • Dionysia Lambiri

Abstract

The purpose of the present work is to analyze whether—and to what extent—tourism activity affects urban house price dynamics in Italy. Using a system Generalized Method of Moments (GMM-SYS) approach and after controlling for socioeconomic characteristics of the local housing markets as well as amenities and disamenities, we test for the effect of tourism by employing a composite index that enables us to capture the complexity of the tourism market. Data consist of yearly observations on the average house prices of 103 Italian cities over the period of 1996–2007. The results confirmed by several robustness checks demonstrate that tourism activity positively affects house prices. In addition, this work provides several first hints that this relationship might not be the same for all types of cities; hence, further developments of the present work should proceed in the direction of searching for different potential regimes through the use of mixture models.

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  • Bianca Biagi & Maria G. Brandano & Dionysia Lambiri, 2015. "Does Tourism Affect House Prices? Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 46(3), pages 501-528, September.
    • Handle: RePEc:bla:growch:v:46:y:2015:i:3:p:501-528
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    14. Mikulić, Josip & Vizek, Maruška & Stojčić, Nebojša & Payne, James E. & Čeh Časni, Anita & Barbić, Tajana, 2021. "The effect of tourism activity on housing affordability," Annals of Tourism Research, Elsevier, vol. 90(C).
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    18. Çigdem Karis & Derya Altintas, 2021. "Tourism’s Effect on the Housing Prices in Turkey: The ARDL Bound Testing Approach," Bingol University Journal of Economics and Administrative Sciences, Bingol University, Faculty of Economics and Administrative Sciences, vol. 5(1), pages 249-276, August.

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