Working Paper Revision

The Closing of a Major Airport: Immediate and Longer-Term Housing Market Effects

Abstract: The closing of a busy airport has large effects on noise and economic activity. Using a unique dataset, we examine the effects of closing Denver’s Stapleton Airport on nearby housing markets. We find evidence of immediate anticipatory price effects upon announcement, but no price changes at closing and little evidence of upward trending prices between announcement and closing. However, after airport closure, more higher income and fewer black households moved into these locations, and developers built higher quality houses. Finally, post-closing, these demographic and housing stock changes had substantial effects on housing prices, even after restricting the sample to sales of pre-existing housing.

Keywords: Airport noise; housing prices; airport closing; anticipatory effects; long-term effects; neighborhood change; dynamic price effects;

JEL Classification: G14; R21; R31; R41;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2021-01-19

Number: 2020-001

Note: Related professional presentation: Cohen, J., Coughlin, C. & Crews, J. (2018, January). Airport Noise and House Prices: Closing of One Airport and Opening of a New Airport in Denver. ASSA Meetings, Philadelphia, PA.

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