Perception vs. Reality: The Aviation Noise Complaint Effect on Home Prices

Abstract

Intercity air transportation has grown rapidly in recent decades and creates significant noise pollution that affects health. Previous research quantifies the losses that are capitalized into home values. Much research relies heavily on spatially restrictive noise contour plots to identify the house price discounts and determine economic damages. We break new ground by investigating whether residential noise complaints can offer insights on aircraft noise pollution and housing price impacts experienced by residents near Minneapolis-Saint-Paul International Airport outside of contour boundaries. Our findings indicate noise complaints are a reliable measure of residential noise annoyance and have a significant adverse effect on home prices extending nearly twice as far (10 km) as contours. Reevaluating economic damages based on our results indicates contour-based calculations severely underestimate aircraft-noise-pollution-induced losses incurred by homeowners and suggests $154 million of $167 million in post-abatement damages are borne by residents located outside the regulated Minneapolis contour area.