Valuation of Noise Pollution and Abatement Policy: Evidence from the Minneapolis-St. Paul International Airport

Abstract

Aircraft noise pollution has adverse physical and mental health effects that are capitalized in the affected home values. We contribute to the literature estimating these noise discounts by our novel identification strategy that analyzes the “treatment effect” of two local government subsidized soundproofing initiatives near the Minneapolis-Saint Paul International Airport. Combining a repeat-sales sample with data on aircraft noise pollution (1990–2014), we find a causal noise discount of around $25,000 per sale of noise-affected, but abatement-ineligible, properties, whereas abatement-eligible homes experience a negligible effect post soundproofing indicating a return on abatement investments as a high as 40% in Minneapolis.