Capitalization of supermarket proximity in house prices in Rotterdam

Amenities are goods or services that provide some kind of comfort to people. Usually they produce positive externalities. Examples of such amenities are employment, good public transport and green space. Disamenities are the opposite: they produce negative externalities and most people tend to dislike them. Noise, pollution and crime are examples of such disamenities. Proximity of shops can have an ambiguous effect: on the one hand, nearby shops provide comfort in terms of short travel time, but they also produce noise and bustle. How is this reflected in house prices? This thesis focuses on the effect of supermarket proximity on house prices in Rotterdam in 2012. Two approaches on proximity are distinguished: distance to the nearest supermarket and the amount of supermarkets in a certain range. The 10 largest supermarket chains in Rotterdam will be analyzed. The focus is on whether there are differences between these supermarket chains and where there are interaction effects between house-level and neighborhood-level characteristics on the one hand and supermarket proximity on the other hand. This study reveals that there are indeed differences between the supermarket chains. Proximity of Dirk and Plus supermarkets tends to have negative impact on house prices, whereas proximity of a Spar has a positive effect. Interaction variables show that these effects are stronger in the north than in the south of Rotterdam.