I can hear my neighbors' fracking: The effect of natural gas production on housing values in Tarrant County, TX

- We use hedonic valuation to quantify the cost of hydraulic fracturing.
- Dataset includes 127,556 residential home sales in Tarrant County, TX.
- We find proximity to a well reduces home sale value between 1.3 and 3.5%.
- There is an additional reduction in home value of 2% during well construction.
- Conventional wells have no significant effect on home values.

In this study we estimate the effect of hydraulically fractured natural gas wells on residential real estate prices. We exploit variation in distance to nearby gas wells in home sale prices to estimate this effect. In contrast to previous studies, we focus on a relatively densely populated area, a section of the Dallas-Ft. Worth-Arlington urban area. Using a dataset of 127,556 observations from Tarrant County, Texas over the period 2005-2011, we find robust evidence that increased proximity to a well leads to reduced home sale prices. Existence of wells within 3500 ft of a property reduces property values by approximately 1.5-3%. We demonstrate that the reduction seems to be driven by unconventional rather than conventional wells, and that well construction causes an added 1-2% reduction in home value.