The influence of noise on net revenue and values of investment properties: Evidence from Switzerland

Fahrländer, Stefan Sebastian; Gerfin, Michael; Lehner, Manuel (January 2015). The influence of noise on net revenue and values of investment properties: Evidence from Switzerland (Discussion Papers 15-02). Bern: Department of Economics

dp1502.pdf - Published Version
Available under License Creative Commons: Attribution (CC-BY).

Download (574kB) | Preview

In this study we use hedonic models to measure the influence of noise nuisance on rents, costs and values of investment properties in Switzerland. Countrywide data is provided by
institutional real estate investors. The effects are measured for aircraft noise, road traffic
noise and railroad noise. We show that negative effects appear between lower and upper
tresholds which vary between different noise types and across residential and non-residential properties. Rents, costs and values are affected below the administrative tresholds given by the LSV and the negative impact ceases at an upper threshold. However high noise nuisance might influence investment decisions, i.e. offices are built instead of housing etc. These important effects are not given account in the data. In addition, directly measured reductions on market values are lower than the expected reductions based on empirical effects on rents and costs. The reasons for the different market value reductions may be found in the Swiss tenancy law. Rents for dwellings within existing rental agreements can only be adjusted in accordance with the change of the “reference interest rate” (Referenzzinssatz) and the CPI. The analysis shows that the average contract duration is dependent on the noise nuisance, which leads to a significant reduction of noise-induced losses within periods of increasing market rents.

Item Type:

Working Paper


03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Gerfin, Michael


300 Social sciences, sociology & anthropology > 330 Economics


Discussion Papers


Department of Economics




Lars Tschannen

Date Deposited:

18 Dec 2020 14:39

Last Modified:

18 Dec 2020 14:39




Actions (login required)

Edit item Edit item
Provide Feedback