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A sound investment? Traffic noise mitigation and property values
Örebro University, Örebro University School of Business. Swedish National Road and Transport Research Institute (VTI), Stockholm, Sweden.ORCID iD: 0000-0002-2667-114X
2021 (English)In: Journal of Environmental Economics and Policy, ISSN 2160-6544, E-ISSN 2160-6552, Vol. 10, no 4, p. 428-445Article in journal (Refereed) Published
Abstract [en]

Traffic noise is a widespread problem that adversely affects health and well-being. A key policy question is how the benefit of noise mitigation compares with the cost. This study estimates the benefits of noise mitigation by its capitalization into property values. Using a dataset on properties considered for a noise mitigation programme, I estimate a difference-in-differences model that compares prices of properties receiving a measure to properties ineligible for the programme. Results show that noise mitigation raised property prices by 10-12 percent. The property price benefits exceed programme investment cost with each $1 spent on noise mitigation generating up to $1.7 in benefits.

Place, publisher, year, edition, pages
Taylor & Francis, 2021. Vol. 10, no 4, p. 428-445
Keywords [en]
Environmental policy, hedonic valuation, noise pollution, property value
National Category
Economics
Identifiers
URN: urn:nbn:se:oru:diva-91549DOI: 10.1080/21606544.2021.1911861ISI: 000640626700001Scopus ID: 2-s2.0-85106003229OAI: oai:DiVA.org:oru-91549DiVA, id: diva2:1549104
Funder
The Jan Wallander and Tom Hedelius Foundation, P19-0010Available from: 2021-05-04 Created: 2021-05-04 Last updated: 2023-12-08Bibliographically approved
In thesis
1. Pollution, Health and Housing Markets: Essays on the Consequences of Environmental Policy
Open this publication in new window or tab >>Pollution, Health and Housing Markets: Essays on the Consequences of Environmental Policy
2021 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The objective of the thesis is to estimate the health and housing market effects of environmental policies and estimate how these effects are distributed among individuals.

The first essay estimates the health effects of a noise mitigation program that provided dwelling insulation and noise barriers. The analysis is based on hospitalization records and an event study model that compares disease rates for residents in treated homes to residents with similar attributes in untreated homes. Results show that noise mitigation reduced the risk of a cardiovascular disease by 12–14 percent after ten years. Effects are driven by a reduced risk of hypertension and stroke and occur primarily among those with lower income and education levels.

The second essay investigates the impact of the same noise mitigation program on property prices. Using records on sales prices and property attributes in a difference-in-difference model, I estimate the price effect to be 10–12 percent, with larger price effects for homes with poor initial exterior quality. Price gains are smaller for top earners, since they sort to high-quality properties that benefit less from noise mitigation.

The third essay examines how information about pollution affects neighborhood composition and households' choice of housing quality. Combining data on sales prices, property attributes and household demographics, I find that the announcement of an airport concession renewal induced higher-income households to sort away from the area exposed to airport pollution. Higher-income households that located to the area selected homes with better quality. These results help reconcile mixed findings on residential sorting behavior in the literature.

The fourth essay estimates the effect of shipping emission standards on air quality and health. The tightening of the sulfur emission standard reduced concentrations of sulfur dioxide by 22 percent and fine particles by 6 percent. In the subsample with air quality readings, the risk of low birthweight dropped by 7 percent.

Place, publisher, year, edition, pages
Örebro: Örebro University, 2021. p. 32
Series
Örebro Studies in Economics, ISSN 1651-8896 ; 46
Keywords
noise, air pollution, health, housing, environmental valuation, distributional effects
National Category
Economics
Identifiers
urn:nbn:se:oru:diva-94174 (URN)9789175294025 (ISBN)
Public defence
2021-10-21, Örebro universitet, Forumhuset, Hörsal F, Fakultetsgatan 1, Örebro, 13:15 (Swedish)
Opponent
Supervisors
Available from: 2021-09-09 Created: 2021-09-09 Last updated: 2021-11-30Bibliographically approved

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Lindgren, Samuel

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