%X This Master’s thesis studies the effect of prisons on house prices. This effect is estimated using the hedonic price method. The causal effect of closing a penitentiary institution is estimated using a difference-in-difference specification. The results of this research prove that penitentiary institutions have a negative impact on house prices in the vicinity and that closure of a penitentiary institution has a positive effect on house prices. Houses within a 300 meter radius of a penitentiary institution are -3.0% lower valued compared to houses that are outside a 300 meter radius. With almost the same magnitude, closure of a penitentiary institution has a positive effect of 2,8% on house prices within 300 meter. Herewith, it can be concluded that people’s willingness to pay for houses reduces due to close proximity of a penitentiary institution.
%A Jurgen Jaakke
%D 2019
%L theses_frw1116
%T The Effect of Prison Proximity on House Prices