The effect of Movida on residential property prices: up or down?

Hedonic regression technique has often been used to study the effect of road, railway and airport noise on property prices. However European cities are experiencing a particular type of noise pollution originated by nighttime recreational activities mainly located in the city centers, the so called “Movida”, which hasn’t been properly investigated yet. The aim of the paper is to examine the effect of recreational noise on residential property prices. We used an original highly detailed housing transactions dataset from the City of Turin covering the period 2017 to 2018 and built an indicator of recreational noise based on the proximity of dwellings to the night recreational activities. The results obtained employing hedonic modelling show that the adverse environment for an apartment located in a “Movida” district will result in a lower market value as compared to an apartment with similar characteristics, except for recreational noise. This occurs because potential buyers reduce their demand, as they discount present value of the costs of annoyance, loss of tranquility and health effects due to sleep deprivation.