Traffic noise and property values: an instrumental variable strategy for hedonic valuation

Транспортный шум и стоимость недвижимости: стратегия инструментальных переменных для гедонической оценки
Luis Bravo-Moncayo, Roberto Mosquera, Virginia Puyana‐Romero, Michelle Romero, José Lucio-Naranjo, Enrique Suárez
2022-06-14

hedonic pricinginstrumental variablesnoise exposureproperty valuestraffic noise
Noise pollution is a consequence of socioeconomic development processes and urbanization. Noise action plans, urban planning, and traffic management are costly, and their undertaking raises the issue of the value of noise reduction to households. We use hedonic pricing to estimate the value of traffic noise for urban residents in Quito, Ecuador. Results were obtained using instrumental variables in order to control the possible omitted variables due to any spatial effect. Considering a large dataset of property attributes and noise exposure, properties inside the mixed land use were compared to those right behind them in a 20-meter buffer, which was characterized by similar structural attributes but different noise exposure levels.
1
An instrumental-variable strategy is employed to control for omitted variables associated with spatial effects in noise exposure and property prices.
2
Properties in mixed-land-use areas are compared with properties immediately behind them within a 20-meter buffer to isolate differences in traffic noise exposure.
3
The comparison exploits similar structural property attributes while contrasting different noise exposure levels, enabling valuation of households’ noise-reduction benefits.
4
The study estimates how traffic noise affects residential property values in Quito, Ecuador, using a hedonic pricing framework.

Urban residential properties in Quito, Ecuador, exposed to differing levels of traffic noise

The effect and hedonic value of traffic noise exposure on property values

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Publication Date
2022-06-14
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Authors
Luis Bravo-Moncayo
Roberto Mosquera
Virginia Puyana‐Romero
Michelle Romero
José Lucio-Naranjo
Enrique Suárez
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