Price effects of surface street traffic on residential property

James E. Larsen (Department of Finance and Financial Services, Raj Soin College of Business, Wright State University, Dayton, Ohio, USA)
John P. Blair (Department of Economics, Raj Soin College of Business, Wright State University, Dayton, Ohio, USA)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Publication date: 27 May 2014

Abstract

Purpose

The purpose of this study is to gauge and compare the impact of surface street traffic externalities on residential properties. Limited previous research indicates that negative externalities dominate for single-family houses. Our objective is to verify that this result applies to our sample, and to determine if the same result extends to multi-unit rental properties.

Design/methodology/approach

Hedonic regression is used to analyze data from 9,680 single-family house transactions and 455 multi-unit rental properties to measure the influence of surface street traffic on the price of the two property types.

Findings

Houses located adjacent to an arterial street sold at a 7.8 per cent discount, on average, compared to similar houses located on collector streets. Limiting the analysis to houses adjacent to an arterial street (where traffic counts were available), price and traffic count are negatively related. The results for multi-unit rental dwellings are dramatically different. Multi-unit properties adjacent to an arterial street sold at a 13.75 per cent premium compared to similar properties on collector streets, and when limiting the analysis to properties on arterial streets, no significant relationship was detected between price and traffic volume.

Originality/value

This is the first empirical study of the influence of surface street traffic on both single-family houses and multi-unit rental residential property. Evidence is provided that traffic externalities impact the two types of properties quite differently. To the extent that this result applies to other locations, the authors suggest planners may be able to use such information to reduce the negative effect of traffic externalities on residential property associated with changes that will increase traffic flow.

Keywords

Citation

James E. Larsen and John P. Blair (2014) "Price effects of surface street traffic on residential property", International Journal of Housing Markets and Analysis, Vol. 7 No. 2, pp. 189-203

Download as .RIS

DOI

: https://doi.org/10.1108/IJHMA-12-2012-0062

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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