Craft breweries and residential property values

Abstract

This paper studies the effect of craft breweries on residential property values. Using a hedonic Difference-in-Differences (DID) approach and about 250 thousand housing transactions in Denver, Colorado from 1990 to 2016, we investigate the impact of proximity to a craft brewery on residential property values. We consider three types of residence (single-family home, row house, and condominiums), three types of brewery (all craft breweries, microbreweries, and brewpubs/taprooms), and two measurements of distance (Euclidian and walk-time). Our most robust results are found for single-family homes, whose values enjoy a premium of up to 20.4% for being in proximity to a brewpub/taproom several years after, with the average annual maximum premium around 3%. As expected, premiums decline as distance from breweries increase. Beyond a distance of 0.5 km or a 10-min walk-time, the premium for a regional/microbrewery is greater than that for a brewpub/taproom. For single family homes within 4 km or 40-min walk-time, the annualized premium ranges between 0.41% and 3.01%. These findings support the narrative that craft breweries are a neighborhood asset.