Do they get high? The effects of Amsterdam's coffeeshops on Air Bnb renting prices

Details

Supervisors

André Luis Squarize Chagas ; Dejemeppe, Muriel

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale

Abstract

The drug issue has a massive impact on almost every society nowadays. It has deep influences in people's quotidian and an almost ubiquitous growth in consumption. This study aims at assessing whether the de facto legal sale of cannabis influences real estate prices. Evaluating how these prices change gives us some notion of the externalities involved in those sales and how people regard it. We organized a panel with georeferenced data from Air Bnb lodgings offered in Amsterdam, from May 2014 until July 2017. During this period, several coffeeshops were closed due to new legislation. We estimate that losing the closest coffeeshop, when it is within a 250m radius from the lodging, decreases the renting price, on average, on 3%, and when it is farther it has no significant impact.