The Cost of Flying The Flag: A Spatial Analysis of The Impact of Flags On House Prices In Northern Ireland

his study uses a state-of-the-art, zero-shot image detection in a first-of-its-kind application of spatial econometrics to a divisive NI cultural issue, the flying of flags. This work builds on a 2006-2009 census of flags along the main arterial routes (Bryan et al., 2010), by providing a comprehensive analysis of flags along the road networks in the largest 50 towns and cities. We examine the spatial distribution of these flags and their relationship with house prices, using a hedonic house price regression framework and a Spatial Durbin Error Model. We find that for each additional flag in an area, there is a 0.051% decrease in the values of properties there. Furthermore, we find that for every flag in one area, there is a 0.050% decrease in house prices in the neighbouring areas. We find that each additional flag has a 0.101% negative impact on house prices in the larger area. When applied to the median or mean flag counts across our dataset, this finding represents a 2.5% or 5.49% dampener on house prices. Based on the average house price of £165,689.40, property owners could be, by median and mean respectively, £4,142.24 or £9,096.35 worse off. With the average Small Area containing 155 households, this represents a £642,047 or £1,409,934 dampener on house prices per Small Area. Approximation for the total impact of flags on house prices across the top 50 towns and cities could be as damaging as £1,674,458,576 to £3,677,108,524. The indirect spill-over effects identified by our model are the largest contributor to this effect. These results illustrate a tangible economic cost of flying flags, that not only has effects on the house prices in their own area but also the areas around it. Our study provides a quantitative argument to the ever-contentious flag debate in Northern Ireland, which we hope can serve as a catalyst for further study, discourse and policy considerations.