An empirical study of the impact of vehicular traffic and floor level on property price

Haizhen Wen, Zaiyuan Gui, Ling Zhang, Eddie C.M. Hui

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)

Abstract

Urban road traffic often generates noise and air pollution, thereby resulting in a disamenity effect on surrounding residential property and subsequently affecting the willingness to pay of homebuyers. Given that the distribution of road-traffic externalities varies in vertical space, heterogeneous effects of road traffic result on properties situated in different floors. Based on data of 7590 multi-story and 4980 high-rise residential property in Hangzhou, China in 2017, this study constructs hedonic price and spatial econometric models to investigate the relationship among road-traffic externality, floor level, and property price. Empirical results show that road-traffic externalities have a significant disamenity effect on property price. Different from existing studies, we find that the floor level has a significant moderating effect on the disamenity effect of road traffic. In particular, effects on different submarkets reveal that capitalization rate is non-monotonic in vertical space and different in multi-story and high-rise buildings. Previous literature has largely ignored these issues, but the latter is crucial in estimating the influence of road-traffic externalities on property price.

Original languageEnglish
Article number102132
JournalHabitat International
Volume97
DOIs
Publication statusPublished - Mar 2020

Keywords

  • Floor level
  • Moderating effect
  • Property price
  • Road-traffic externality
  • Spatial econometric model
  • Vertical heterogeneity

ASJC Scopus subject areas

  • Urban Studies

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