Noise pollution

Linguistics

Engineering

Philosophy

Transport engineering

Capitalization

Environmental economics

Microeconomics

Economics

Computer science

Aircraft noise

Business

Economic geography

Residential property

Image (mathematics)

Externality

Econometrics

House price

Environmental science

Artificial intelligence

Architectural engineering

Programming language

Relocation

Noise reduction

Noise (video)

Land Use Policy

In this study, we investigate the benefits of reducing airport noise externalities based on a natural quasi-experiment on exogenous variation in aircraft noise from the relocated Hong Kong Kai Tak Airport in 1998. We collect housing transaction data from 1993 to 2006 in residential areas near this airport and employ the difference-in-difference method to measure the capitalization of noise externality into local house prices. Results show that the disappearance of aircraft noise leads to an average 24.43% increase in the prices of houses surrounding the airport. In addition, the influence of airport relocation decreases with the distance to the airport. These results remain consistent across various model specifications. Moreover, the prices of houses near the airport have become on the rise after the airport noise pollution has been eradicated. Our results justify the government compensation for households subjected to airport noise exposure. Quantifying the implicit price of noise pollution also helps to formulate additional appropriate compensation mechanisms and urban planning projects.

Airport noise and house prices: A quasi-experimental design study