Working Paper

Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets

Abstract: The closing of a busy airport has large effects on noise and economic activity. We examine the effects of Stapleton airport?s closing on nearby, Denver housing markets. We find evidence of immediate anticipatory effects on prices upon announcement of the closing, but no price changes at closing likely because it was widely anticipated. However, we find that high income and white households delayed moving into these locations until after the airport?s closing. Also, developers upgraded the quality of houses being built after closing. Further, post-closing, these demographic and housing stock changes had substantial effects on housing prices.

Keywords: airport noise; housing prices; airport closing; anticipatory effects; dynamic price effects;

JEL Classification: R31; R41;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2019-10-14

Number: 2019-27

Note: 2020-01-08 Formally withdrawn from the Federal Reserve Bank of St. Louis Working Paper Series and replaced with new version: The Closing of a Major Airport: Immediate and Longer-Term Housing Market Effects. See Related Works.

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