Urban traffic reduction boosts housing prices | The Hague

This study was done in collaboration with the Dutch municipalities The Hague and Leidschendam-Voorburg.

A new bypass built through two Dutch municipalities relieved local streets from through traffic. We find that the benefits of traffic reduction amounted to some 3000 euro per household or 5 mln euro per kilometer bypass. However, local residents did not foresee the improvement before the bypass was opened.

To calculate the benefits we compared housing prices on affected streets in the years before and after the bypass opening in 2003. Indeed, a decreased traffic nuisance makes a location more attractive and thus leads to higher prices. The Figure above confirms this reasoning. The prices on affected streets (red line) jumped up in 2003; before they had followed the general trend (blue line).

If local residents would have expected the nuisance reduction, housing prices would have increased before the opening already, in anticipation. The Figure shows this is not the case. The fact that residents did not foresee the improvement may help explain the heavy local protests that delayed the construction of the bypass with several decades.

April 2016


- Ossokina, I.V. and G.Verweij, 2015, Urban Traffic Externalities, in Regional Science and Urban Economics.

- Ossokina, I.V. and G.Verweij, 2016, Omgevingsbaten onderschat bij wegaanleg (in Dutch) in Economisch-Statistische Berichten.