Working Paper

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 likely because closing was widely anticipated. Further, after airport closure, high income and white households moved into these locations and developers upgraded the quality of houses being built. Finally, post-closing, these demographic and housing stock changes had substantial effects on housing prices, even after restricting the sample to 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: 2020-01-08

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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