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

Langen, M., Aydin, E., Eichholtz, P. and Kok, N. (2021) Getting high or getting low? The external effects of coffeeshops on house prices. Real Estate Economics. ISSN 1540-6229 (In Press)

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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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