Study Reveals ‘Starbucks Effect’ on Home Prices.
Having a Starbucks open near a neighbourhood could increase nearby home values, potentially by a few thousand dollars, a new study from Harvard Business School finds. The study’s authors focused on the gentrification of neighbourhoods using Yelp data but discovered the “Starbucks effect” during their research.
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Using Yelp data to find the entry of each Starbucks in a ZIP code, researchers found a 0.5 percent increase in housing prices within a year after a Starbucks opens.
Harvard economics professor Edward Glaeser says he believes the home price rises are not due to the actual Starbucks opening but may be more of an indicator of affluent customers in the area.
"The presence of a Starbucks is far less important than whether the community has people who consume Starbucks," Glaeser notes in the paper. "Consequently, we think that this variable is likely to be a proxy for gentrification itself. … The most natural hypothesis to us is that restaurants respond to exogenous changes in neighbourhood composition, not that restaurant availability is driving neighbourhood change.”
Overall, gentrification, according to the paper says, is “strongly associated” with increases in the numbers of grocery stores, cafes, restaurants, and bars.