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Externality Effects on Residential Property Values: The Example of Noise Disamenities
Author(s) -
CLARK DAVID E.
Publication year - 2006
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.2006.00332.x
Subject(s) - residential property , externality , property value , economics , demographic economics , hedonic pricing , public economics , noise (video) , econometrics , microeconomics , economic geography , finance , real estate , artificial intelligence , computer science , image (mathematics)
Studies conducted by the Federal Railroad Administration in the 1990s reveal that train whistle bans lead to higher accident rates at train crossings. However, advocates of these bans argue that they eliminate noise externalities that have a detrimental effect on residential home values. To assess this latter claim, an event study is conducted and hedonic models are estimated for three different areas in which Conrail unilaterally began ignoring local whistle bans. While the findings consistently show that proximity to rail lines has a negative and statistically important influence on home values, there is little evidence that the Conrail decision had any permanent and appreciable influence on the housing values in these communities. In two of the three study areas, there is no statistically significant impact of the Conrail action, and in the third area, the effects are found to be temporary in duration.