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 noiseon property prices. However, European cities are experiencing a particular type of noise pollutionoriginated by night-time recreational activities mainly located in the city centres, the so-called 'Movida',which has not been properly investigated yet. The aim of this paper is to examine the effect ofrecreational noise on residential property prices. We used an original highly detailed housing transactionsdataset from the City of Turin covering the period 2017 to 2018 and built an indicator ofrecreational noise based on the proximity of dwellings to the night recreational activities. The resultsobtained employing hedonic modelling show that the adverse environment for an apartment located ina 'Movida' district will result in a lower market value as compared to an apartment with similarcharacteristics, except for recreational noise. This occurs because potential buyers reduce their demand,as they discount the present value of the costs of annoyance, loss of tranquillity and health effects due tosleep deprivation.