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Federal Reserve Bank of St. Louis
Working Papers
Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets
Jeffrey P. Cohen
Cletus C. Coughlin
Jonas C. Crews
Stephen L. Ross
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.


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Jeffrey P. Cohen & Cletus C. Coughlin & Jonas C. Crews & Stephen L. Ross, Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets, Federal Reserve Bank of St. Louis, Working Papers 2019-27, 14 Oct 2019.
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Keywords: airport noise; housing prices; airport closing; anticipatory effects; dynamic price effects
DOI: 10.20955/wp.2019.027
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