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Tourism and house prices in Italy

Author

Listed:
  • Bianca Biagi

    (University of Sassari and CRENoS, Italy)

  • Maria Giovanna Brandano

    (University of Sassari and CRENoS, Italy)

  • Steven B. Caudill

    (Florida Atlantic University, USA; University of Sassari and CRENoS, Italy)

Abstract

Evaluating the impact of tourism on housing prices is an important endeavor, but the usual empirical approach is to estimate a single regression model with house price as a function of tourism and other variables. This approach does not allow for individual heterogeneity. In this article, the authors apply a latent class model to estimate the impact of tourism activities on housing prices in Italy. In particular, they allow for three different unobservable classes or regimes, permitting the impact of tourism on house prices to differ across classes. In other words, they allow for unobservable heterogeneity. The empirical results do support the existence of three classes of house price regressions. Using two different indices of tourism activity, for certain cities (about 21–48% of the sample), increases in tourism activity increase housing prices and for other cities (8–17%) increases in tourism activity decreases housing prices. For approximately half of the sample, increases in tourism activity have no impact on housing prices.

Suggested Citation

  • Bianca Biagi & Maria Giovanna Brandano & Steven B. Caudill, 2016. "Tourism and house prices in Italy," Tourism Economics, , vol. 22(5), pages 964-978, October.
    • Handle: RePEc:sae:toueco:v:22:y:2016:i:5:p:964-978
    DOI: 10.5367/te.2015.0470
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    References listed on IDEAS

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    3. 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.
    4. 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).
    5. Resce, Giuliano & Vaquero-Piñeiro, Cristina, 2024. "Political favouritism and inefficient management: Policy-makers’ birth town bias in EU quality certifications," Journal of Policy Modeling, Elsevier, vol. 46(3), pages 683-702.
    6. Časni Anita Čeh & Filić Josipa, 2022. "Tourism housing price nexus," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(2), pages 53-65, December.

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