Publication
This dissertation collects three essays on the hedonic modelling of housing prices, location attributes and environmental amenities – or lack thereof. The first essay applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. We exploit a large database of geo-referenced noise measurements to investigate the reaction of house prices to different noise metrics. The particular institutional setting of Zurich Airport, with a changing pattern of runway configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of location descriptors. We document the impact of airport noise on housing prices. In the base model specification, the Noise Discount Index, i.e. the percentage depreciation per dB of aircraft noise, is 0:97%. Typical discounts are in the range of –2% to –8%. The results are similar to comparable Swiss and international studies on the impact of aircraft noise on residential property prices. From a methodological point of view, we show that accounting for the spatiality of the data has little effect on the results. In the second essay we estimate the willingness to pay for housing attributes of single-family home owners located in the greater Zurich area. A revealed-preferences approach is used, in which a structural hedonic model is identified and estimated. Our approach explicitly accounts for the heterogeneity of preferences of the owner-occupiers. Again, we use the GIS to match the data describing the housing characteristics and the attributes of the location to the socioeconomic traits of the owners. We perform a nonparametric estimation of the hedonic model that allows us to recover the preference parameters. We measure the impact of income differences on the willingness to pay for five major characteristics, i.e. travel time to the city center, size and age of the housing unit, lot size and proximity to a major environmental amenity, the Lake of Zurich. We show that the willingness to pay for the environmental amenity and for centrality is highly income elastic, while the demand for the lot size and for the house surface is not. We put the model in the context of the new urban economic literature which studies the importance of amenities for the location decision of households in cities. In the last part of the dissertation, we touch on another typical urban economics topic – the elasticity of substitution between capital and land. This concept is key in understanding some important phenomena like urban sprawl or urban density. Combining two new rich data sets on disaggregated land and house transactions, we propose one of the first estimates of this elasticity for a non-U.S. metropolitan region. For the region of Zurich we find an elasticity of substitution of 0:6 and an own-price elasticity of the dema