Published Projects.
01
The Impact of Germany’s Railroad Noise Protection Act on House Values
Abstract: In 2017, the German federal government enacted the Railroad Noise Protection Act to diminish noise from freight trains. This study assesses the legislature’s impact on residential property values through regional analysis of affected properties proximate to railway tracks and residences at a greater distance before and following the enactment of the national policy. The difference-in-difference analysis indicates that homes located near the tracks experience an increase in house prices ranging from 0.5 to 2.5%, depending on the time periods considered for the passing and implementation of the act. An assessment of heterogeneity demonstrates that the favorable impact of the Railroad Noise Protection Act intensifies as the distance to the tracks shortens. Moreover, individuals with the highest noise exposure, not just from railroads, benefit the most from the policy.
Published in Journal of Real Estate Research
02
Housing Prices, Airport Noise and an Unforeseeable Event of Silence
Abstract: To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations showing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local factors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.
(Joint work with P. Breidenbach)
Published in Journal of Housing Economics
03
The Impact of COVID-19 on Real Estate Markets in Germany
Abstract: The COVID-19 pandemic has disrupted established urban patterns. The literature on the impact of the pandemic on real estate markets in the US has shown a significant increase in the demand for suburban housing, resulting in a considerable increase in suburban prices compared to those in the city center (termed the “donut effect”). However, the German housing market did not experience such drastic changes. To examine price and rent adjustments during the pandemic, we analyze detailed housing data and find little evidence supporting the donut effect seen in the US. Apartment rents increase in suburban areas, while house prices do not change significantly. Examining the role of amenities, we find no explanation for price and rent differences between the central business district (CBD) and suburbs. The differences between the two markets may be attributed to cultural and structural distinctions. Our analysis, which includes data on population patterns and migration behavior, reveals that residents in Germany exhibit a slower-moving trend. Our findings remain robust across different settings and subsets of cities.
(Joint work with E. Beze)
Published in German Economic Review
Working Projects.
01
Heterogeneous Pass-through over Time and Space – The Case of Germany’s Fuel Discount
Abstract: Exploiting exogenous variation in retail fuel prices from a temporary fuel tax discount in Germany, we estimate how the pass-through of the discount varies over space and time. We draw on daily gasoline prices of virtually all gas stations in Germany and neighboring France, with France serving as a control, and estimate an event study model covering the full period of the discount from June to August 2022. We find average pass-through rates on the order of 87% for diesel and 71% for petrol, but with substantially lower rates in high-income regions and in regions with a low degree of competition. More strikingly, our results suggest pronounced heterogeneity over time: The magnitude of the pass-through rate dissipates sharply over the three months in which the discount was in effect, dropping to 50% by the final month, a pattern consistent with retailer responses to short-term changes in consumer attention. Taken together, our results indicate that average pass-through estimates may obscure a high degree of spatial and temporal heterogeneity that bears upon the assessment of competition and distributional effects: While our estimation of the budgetary costs of the discount confirms the government’s a priori estimate of €3.1 billion, we find that about 61% of the discount’s financial relief accrues to households with above-median incomes.
[Version March 2024]
Status: Revise and Resubmit at Regional Science and Urban Economics
Published as Ruhr Economic Papers #1087
02
Open Space Amenities: Is Closer Better?
Abstract: The value of open space is often reflected by the higher prices of the homes located in its proximity. But is closer always better? We examine this question by estimating a hedonic regression using pooled crosssectional data from Germany spanning 2007 until 2023. We distinguish two types of open space, parks and protected areas (PAs), and explore heterogeneity in the effects of the latter according to prevailing environmental attitudes, as measured by the share of the Green party vote. Results suggests that increasing distance to parks substantially decreases home prices, with the magnitude of the effect weakening as distance increases. Increasing distance to PAs likewise decreases home prices, but the effect is smaller and hardly varies by distance. More strikingly, we find a negative effect of PAs on prices for homes located within their boundaries, with no evidence that this effect is mediated by the share of Green voters. One possible explanation is that the restrictions that often accompany PAs may offset their amenity value, irrespective of local political support for conservation, a reaction that planners would be wise to anticipate in siting decisions.
(Joint work with A. Temel and C. Vance)
[Version November 2024]
Published as Ruhr Economic Papers #1109