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Paying for Quietness: The Impact of Noise on Geneva Rents

Geneva School of Business Administration (HEG-Genève), University of Applied Sciences of Western Switzerland, 7 route de Drize, CH-1227 Carouge-Geneva, Switzerland, Andrea.-Baranzini{at}heg.ge.ch

José V. Ramirez

Geneva School of Business Administration (HEG-Genève), University of Applied Sciences of Western Switzerland, 7 route de Drize, CH-1227 Carouge-Geneva, Switzerland, Jose.Ramirez{at}heg.ge.ch

Using the hedonic approach, this paper analyses housing market data to infer the impact of noise on rents in Geneva, Switzerland. Using three different databases, including a geographical information system (GIS), structural, accessibility and environmental variables were obtained for a large proportion of apartments rented in Geneva. The paper is thus in line with the new generation hedonic models, which exploit the vast potential of GIS to obtain large databases including detailed characteristics of the apartments. In addition, different and original measures of noise were used in order to assess possible differences of the noise impact on rents, while existing studies typically refer to a single noise index. This paper assesses the impacts of noise related to all sources, but also to airport noise only, while existing studies usually refer to road or aircraft noise. The results can be summarised as follows. First, it is shown that the impact of all sources of noise on rents at the level of the whole canton is about 0.7 per cent per dB(A) and about 1 per cent when considering exclusively airplane noise, in the airport area. Secondly, this impact does not change fundamentally depending on the different measures of noise used in the estimations. Thirdly, the impact of noise does not depend on the institutional structure of the market-i.e. it is relatively similar in the private rental sector and in apartments directly under government control, although in the former the dynamic of noise has a greater impact. Fourthly, the results show that noise also has a higher economic impact, when the background noise level is lower. And fifthly, air pollution has a distinct impact on rents, in addition to noise.

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