Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7361374 | Journal of Environmental Economics and Management | 2018 | 24 Pages |
Abstract
Incomplete information can lead households to underprice environmental disamenities in the housing market. To bound the true implicit prices, researchers sometimes study high-profile cases involving significant media and community attention. However, prior research finds that high-profile cases may lead to “stigma” effects that can confound interpretation of the results. This study compares these opposing effects at sixteen of the highest profile underground storage tank releases across the United States over the last thirty years. Using covariate matching and difference-in-differences hedonic regressions, we estimate the change in housing values around each site. We then conduct a cross-site meta-analysis to estimate the average treatment effects. We find an average housing price depreciation of 2-6% upon discovery of a release, which is an upper bound on the implicit price of contamination at more typical sites. Following cleanup, we find a housing price appreciation of a similar magnitude, suggesting that even in high-profile cases, surrounding neighborhoods do not experience persistent stigma.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Dennis Guignet, Robin Jenkins, Matthew Ranson, Patrick J. Walsh,