The impact of air pollution and noise on the real estate market. The case of the 2013 European Green Capital: Nantes, France

- Air and noise pollution are expected to explain housing price in Nantes, France.
- Some location attributes may simultaneously explain air and noise pollution.
- Air pollution has no significant impact on the price of houses in Nantes.
- Noise exposure is affected by location attributes, and influences housing values.
- The age and previous location of the purchasers lead to differentiated results.

In this paper, we aim to demonstrate the way air pollution and noise may affect the well-being of the inhabitants of Nantes, France, designated the European Green Capital in 2013. We use a database compiling certain attributes of the houses that exchanged hands and their price. In order to understand the complex relationships that can exist between explanatory variables and housing price, we consider not only the direct effects of air pollution and noise on the price of around 3000 houses sold in Nantes and its metropolitan area from 2002 to 2008, but also the way some location attributes of the dwellings may affect air pollution and noise. We demonstrate that even if air pollution may be affected by some location characteristics of the house, this variable has no significant impact on the price, in the end. Noise is affected by the location of the house and exerts some significant effect on housing price. However, whilst air pollution does not impact at a global level, people who have lived in an air polluted county before coming to Nantes are sensitive to air quality, whereas those who come from a low air polluted county tend to choose low noise exposure dwellings.