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Traffic noise effects of property prices: hedonic estimates based on multiple noise indicators

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Valuation of traffic noise abatement based on hedonic pricing models of the property market has traditionally measured the noise as the equivalent, or another average, level. What is not captured in such a noise indicator is the maximum noise level of a vehicle passage. In this study, we incorporate the maximum noise level in the hedonic model letting the property price depend on both the equivalent noise level and the maximum noise level. Hedonic models for both rail and road noise are estimated. Data consists of characteristics of sold properties, property-specific noise calculation, and geographical variables. We use the hedonic approach to estimate the marginal willingness to pay (WTP) for maximum noise abatement where we model the effect as the maximum noise level subtracted with the equivalent noise level. Furthermore, we control for the equivalent noise level in the estimations. The estimated results show that including the maximum noise level in the model has influence on the property prices, but only for rail and not for road. This means that for road we cannot reject the hypothesis that WTP for noise abatement is based on the equivalent noise level only. For rail, on the other hand, we estimate the marginal WTP for the maximum noise level and it turns out to be substantial. Also, the marginal WTP for the equivalent noise levels seems to be unaffected by the inclusion of the maximum noise level in the model. More research of this novel topic is requested though.

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  • Andersson, Henrik & Swärdh , Jan-Erik & Ögren , Mikael, 2015. "Traffic noise effects of property prices: hedonic estimates based on multiple noise indicators," Working papers in Transport Economics 2015:11, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2015_011
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    File URL: http://www.transportportal.se/swopec/CTS2015-11.pdf
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    1. Jon P. Nelson, 2008. "Hedonic Property Value Studies of Transportation Noise: Aircraft and Road Traffic," Springer Books, in: Andrea Baranzini & José Ramirez & Caroline Schaerer & Philippe Thalmann (ed.), Hedonic Methods in Housing Markets, chapter 3, pages 57-82, Springer.
    2. Henrik Andersson & Lina Jonsson & Mikael Ögren, 2010. "Property Prices and Exposure to Multiple Noise Sources: Hedonic Regression with Road and Railway Noise," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 73-89, January.
    3. Andrea Baranzini & José V. Ramirez, 2005. "Paying for Quietness: The Impact of Noise on Geneva Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(4), pages 633-646, April.
    4. Andersson, Henrik & Jonsson, Lina & Ögren, Mikael & Swärdh, Jan-Erik, 2012. "Estimating non-marginal willingness to pay for railway noise abatement: Application of the two-step hedonic regression technique," LERNA Working Papers 12.27.384, LERNA, University of Toulouse.
    5. Dekkers, Jasper E.C. & van der Straaten, J. Willemijn, 2009. "Monetary valuation of aircraft noise: A hedonic analysis around Amsterdam airport," Ecological Economics, Elsevier, vol. 68(11), pages 2850-2858, September.
    6. Aaron Swoboda & Tsegaye Nega & Maxwell Timm, 2015. "Hedonic Analysis Over Time And Space: The Case Of House Prices And Traffic Noise," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 644-670, September.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    8. Kenneth A. Small & Seiji S.C. Steimetz, 2012. "Spatial Hedonics And The Willingness To Pay For Residential Amenities," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 635-647, October.
    9. P. C. Cheshire & E. S. Mills (ed.), 1999. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 3, number 3.
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    Cited by:

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    3. Konstantin A. Kholodilin & Mariia A. Maksimova, 2019. "How does subway and ground transit proximity affect rental prices?," HSE Working papers WP BRP 212/EC/2019, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Noise; Hedonic regression; Rail; Road; Equivalent level; Maximum level;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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