An empirical study of the impact of vehicular traffic and floor level on property price. (March 2020)

• Record Type: Journal Article
• Authors: Wen, Haizhen; Gui, Zaiyuan; Zhang, Ling; Hui, Eddie C.M.
• Is Part Of: Habitat international. Volume 97(2020)
• Publication Date: 2020-03
• Subjects: Road-traffic externality -- Property price -- Floor level -- Moderating effect -- Vertical heterogeneity -- Spatial econometric model; Human settlements -- Periodicals; 307
• DOI: 10.1016/j.habitatint.2020.102132
• Languages: English
• ISSNs: 0197-3975

Abstract

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. Highlights: Disamenity effects of road traffic on property price are examined from the vertical dimension. Spatial hedonic price models are developed to control the spatial dependence of property price. The floor level has a significant moderating effect on the external effect of road traffic. Disamenity effects of road traffic shows vertical heterogeneity at different floor levels. Road-traffic externalities shows different laws in multi-storey building and high-rise building.