The effects of highway development on housing prices

O.D. Levkovich, J. Rouwendal, R. van Marwijk

Research output: Contribution to JournalArticleAcademicpeer-review


The purpose of this research is to estimate the effects of highway development projects on the price of housing. Transportation development projects, highways in particular, improve a certain area’s accessibility but also increase its levels of exposure to traffic intensity and noise pollution. These externalities are evaluated by homeowners and residents and are reflected in the price of housing. In this paper, we use several repeat sales model specifications, including difference-in-differences estimators, and control for neighborhood effects to examine housing price trends in the municipalities around two newly developed highways in the Netherlands. The results of the research demonstrate that changes in accessibility result in a significant positive effect on the price of housing in nearby municipalities, but that increased noise pollution and traffic intensity levels result in a decrease in prices. The findings also confirm that combining the total effects of all externalities, the effect of highway development on the price of housing is generally positive, and this effect is salient even before the project is completed due to public anticipation effects.
Original languageEnglish
Pages (from-to)379-405
Issue number2
Publication statusPublished - 2016

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