Getting high or getting low? The external effects of coffeeshops on house prices

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Langen, M. ORCID: https://orcid.org/0000-0002-9116-4654, Aydin, E., Eichholtz, P. and Kok, N. (2022) Getting high or getting low? The external effects of coffeeshops on house prices. Real Estate Economics, 50 (2). pp. 565-592. ISSN 1540-6229

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To link to this item DOI: 10.1111/1540-6229.12365

Abstract/Summary

Cannabis legalization is a hotly contested policy topic. While beneficial to some, cannabis dispensaries may create negative externalities for others. This paper studies the external effects of coffeeshops – Dutch cannabis sales facilities – on house prices. We employ a difference-in-difference framework around a change in regulation, leading to exogenous coffeeshop closings. We find that closings have a negative effect on house prices. Compared to homes nearby remaining coffeeshops, homes nearby closing coffeeshops decrease on average 1.6 to 8.5 percent in value. The findings are robust to a battery of tests and unaffected by the subsequent use of coffeeshop locations.

Item Type:Article
Refereed:Yes
Divisions:Henley Business School > Real Estate and Planning
ID Code:101041
Publisher:American Real Estate and Urban Economics Association
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