Three Essays on the Economic Effects of Travel and Transportation on Urban and Regional Economies

In this thesis, I study the economic effects of travel and transportation on urban and regional economies. Using three distinct quasi-natural experiments, I analyze (i) on a city level the effect of short-term rentals on the housing market in Los Angeles, (ii) on a country level the ramifications of low emission zones on the housing market in Germany, and (iii) on a regional level the consequences of an aviation market reform on economic development in the European Union. In the first essay, I study the regulation effects of the online short-term rental platform Airbnb on the housing market. In Los Angeles County, 18 out of 88 cities have severely restricted short-term rentals by adopting Home Sharing Ordinances. I apply a panel regression-discontinuity design around the cities’ borders. Ordinances reduced listings by 50 percent and housing prices by 2 percent, on average. Additional difference-in-differences estimates show that ordinances reduced rents also by 2 percent. These estimates strongly differ according to geography and are particularly pronounced in touristic areas. In the second essay, I analyze whether people’s perceptions of improvements in local air quality are reflected in the housing market, based on comprehensive data on real estate prices from Germany. Using a quasi-experimental research design, I exploit the staggered introduction of Low Emission Zones (LEZs) across German cities, lowering urban air pollution by limiting the access of high-emitting vehicles. I find that residents value the presence of LEZs, reflected by roughly 2 percent higher apartment rents. Estimates are similar, albeit smaller in magnitude, for properties for purchase. The results are driven by earlier LEZ implementations and LEZs in areas with relatively higher pre-intervention pollution levels. In the final essay, I exploit market changes induced by the Single European Aviation market liberalization initiative to bring new evidence on the link between regional airports and economic development. Using administrative level data for the EU-15, I apply a difference-in-differences research design to identify the causal effects and spillovers of regional airports on local economic activity, population, and employment. The results suggest that the effect of the presence of regional airports on economic activity in the EU is positive, ranging between 2 and 6 percent. An additional instrumental variable estimation points towards a similar outcome, with each additional 1 million passengers yielding a positive effect on GDP of between 2 and 3 percent.


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