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The impact of historic preservation policies on housing values: a case study in Norway

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  • Ida Qvenild Nesset
  • Are Oust

Abstract

Dwellings of historic value offer qualities that benefits the owner or user, or the society in general. Historic preservation involve use of different policies including push and pull strategies to help protect and manage historic valuable dwellings for present and future generations. The majority of previous studies aiming to assess the impact of historic preservation on housing values employ hedonic pricing models to control for the heterogeneous nature of dwellings. These studies show deviant results and cannot, however conclude whether the observed historic preservation premium are due to a policy effect because it is likely to include a heritage effect due to unobserved characteristics that got the dwelling historic preserved in the first place. This study expands upon previous studies by introducing a unique dataset, which combines data of historic preserved dwellings in Oslo, Norway, and data from the housing market from 1990 to 2017, allowing us to study sales prices for the same dwellings both before and after the action of historic preservation. We further address the omitted variable bias by estimating a two-way fixed effects model including a differences-in-differences estimator. Our results suggest a policy premium of about 4%. Moreover, results suggest that the dwellings subject to the strictest policy hold a lower policy premium than the dwellings subject to the less strict policy, what implies quite clear policy recommendations.

Suggested Citation

  • Ida Qvenild Nesset & Are Oust, 2018. "The impact of historic preservation policies on housing values: a case study in Norway," ERES eres2018_196, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2018_196
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    References listed on IDEAS

    as
    1. Olaussen, Jon Olaf & Oust, Are & Solstad, Jan Tore, 2017. "Energy performance certificates – Informing the informed or the indifferent?," Energy Policy, Elsevier, vol. 111(C), pages 246-254.
    2. Douglas S. Noonan, 2007. "Finding an Impact of Preservation Policies: Price Effects of Historic Landmarks on Attached Homes in Chicago, 1990-1999," Economic Development Quarterly, , vol. 21(1), pages 17-33, February.
    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
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    More about this item

    Keywords

    differences-in-differences; fixed effects; Historic Preservation Policies; housing values;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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    This paper has been announced in the following NEP Reports:

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