The impact of military base site return on nearby housing prices: evidence from Camp Market in Incheon, Korea

This study examines the causal impact of a U.S. military base’s closure and return on nearby housing prices in Incheon, Korea. Employing apartment transaction data and a Difference-in-Differences (DID) framework, we analyze the case of Camp Market, which was returned to the Incheon Metropolitan government under the Korea-U.S. Land Partnership Plan. Apartment units located within 1 km of the base boundary constitute the treated group, while those located 2 km farther away serve as the control group. We find that housing prices in the treated area rose by approximately 6.2% more than those in the control area following the base return. These results remain robust across various specifications, including Synthetic Difference-in-Differences and a sensitivity analysis which allows for smooth deviations from the parallel-trends assumption. Our findings suggest that base closures in urban settings can generate sizable capitalization effects in residential markets. This provides critical insights for policymakers evaluating the economic implications of U.S. base relocations.