Impact of Aircraft Noise on House prices Case of Essendon Airport Melbourne

Introduction This study investigates the impact of airport noise on property prices by taking distance from different runways and studying the different noise contours. Using hedonic pricing analysis I study how house price changes with the change in distance. Distance is a measure of noise towards quietness

Reasons The airports are mostly sited on or around urban areas as is the Essendon airport, make noise a problematic issue for the people living near an airport. In every meeting resident voiced concerns about low- flying aircraft, noise levels, aircraft breaching the 11pm-6am curfew, increased aircraft traffic and the devaluation of properties surrounding the airport.

Essendon Airport Essendon Airport began its operations in 1919 as an all over field and was officially designated an international airport in The existing terminal building was constructed in In 1962, the Commonwealth approved the establishment of a new international and domestic airport at Tullamarine (Melbourne Airport) and international and domestic flights were transferred from Essendon Airport to the new Melbourne Airport facility in Essendon Airport Pty Ltd was granted a 50 year lease with 49 year option in Control of Essendon Airport Pty Ltd was transferred to a joint venture of the Linfox and Becton Groups in September In 2005, the Becton Group transferred its interest to Beck Corporation. Today, Essendon Airport operates as a general aviation airport with a mixture of commercial and light industrial activities

Figure1.Historic Aircraft Movements

Figure 2. Aerial View of Essendon Airport

Figure 3. Flight Pattern on the main runway of Essendon Airport

Figure 4. Noise Contour Map of Essendon Airport

Data Sources Housing data in my study is drawn from the confidential source that is land Titles office (Victoria). The housing data consists of information on various characteristics of the properties sold during January 2002 to December 2012 Data for noise externality is extracted from the noise contour map of the Essendon Airport shown in figure 4. Neighbourhood characteristics for each postcode are obtained from the Australian Bureau of Statistics 2011 Census.

Comparative Analysis of Noise Contours

Methodology

Results Distance (km).112*.124*.124*.121* (0.027) (0.027) (0.027) (0.025) In block size 0.544* * (0.029) (0.876) (18.749) (17.322) In Block Size Squared 0.364* (0.069) (3.002) (2.772) In Block Size Cubed (.160) (0.147) Bedrooms (3) 0.113* (0.026) Bedrooms (4) 0.219* (0.036) Bedrooms (5) 0.245* (0.045) Bedrooms (6) (0.227) Bedrooms (7) (0.231) In Built Area 0.192* (0.027) Demographics Yes Yes Yes Yes Factors Sale Quarter Yes Yes Yes Yes (Dummy) Other a Yes Yes Yes Yes (Dummy) R Squared Adj R squared Observations

Distance and Accessibility regression coefficients Set 1 Distance.11*.5898* (Distance) * Distance dummies 1 base *** 4.158* 5.116*** Set 2 Accessibility(km).083*.169 (near to away) (Accessibility) Accessibility dummies 1 base 2.11*** 3.11*** 4.17* 5.24* 6.24* 7.21** Set 3 Noise Contour Dummies 1 (ANF30) base 2 (ANF25) (ANF20).092*** 4 (OUTSIDE).046

Effect size with Distance It means property prices increase at increasing rate up to 1.80 km (.5898/ 2*.1626), then after increase at diminishing rate.

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