How do housing prices adjust after an environmental shock? Evidence from a state-mandated change in aircraft noise exposure
نویسندگان
چکیده
We analyze price adjustments in the housing market after an exogenous shock. Exploring continuous-time records of prices around a major European airport (ZRH, Switzerland), and an unexpected change in flight regulations induced by the neighboring country Germany, we find that apartment rents take about two years to stabilize to a new equilibrium value. After this period we find a constant markup for apartments in regions exposed to less aircraft noise, and a constant discount in regions with more noise. Alternative demand-side indicators like search effort and turnover adapt to the new macro situation and reach pre-shock levels also after about two years, whereas little evidence is found for supply-side effects. JEL Classification: Q51, D58, C23
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