Depreciation of Property Prices Around Airports: Meta-Regression of Hedonic Price Studies

The external costs of aviation noise are an important input for policy assessment for cost-benefits analysis. The Noise Depreciation Index (NDI) is used to capture the externality costs through measuring the depreciation of property prices exposed to aviation noise. Existing NDI estimates from Hedonic Price studies range from no statistically significant effect to a 2.3% decrease in property prices for every dB of increase in noise exposure. This paper summarizes these studies and examines the underlying differences in order to transfer these NDI values to other parts of the world, where NDI estimates are not directly available. The previous meta-analyses of the NDIs are found to be inconclusive, with one study suggesting higher property prices (relative to income) increases the NDI estimates, while another finds no significant effect of property prices (in level) on NDI. This paper extends previous studies by incorporating a larger number of studies with a larger geographical coverage. Underlying property prices, expressed either in level or in relative terms, have been found to have a positive effect on the NDI estimates. Studies using linear specification in the Hedonic Price model generally report higher NDI estimates. Studies that control for proximity benefits of airports have consistently higher NDI estimates for different model specifications, although statistically not significant. This indicates the benefits of reducing noise around airports could be higher than previously anticipated. Also, the property price dependence allows the NDI estimates to be transferred to other locations using local property prices for cost-benefit analysis.

Language

  • English

Media Info

  • Media Type: DVD
  • Features: Figures; References; Tables;
  • Pagination: 22p
  • Monograph Title: TRB 88th Annual Meeting Compendium of Papers DVD

Subject/Index Terms

Filing Info

  • Accession Number: 01122371
  • Record Type: Publication
  • Report/Paper Numbers: 09-2307
  • Files: TRIS, TRB
  • Created Date: Jan 30 2009 6:40PM