Does Proximity to a Power Plant Affect Housing Property Values of a City in South Korea? An Empirical Investigation

Ju-Hee Kim, Young-Kuk Kim and Seung-Hoon Yoo ()
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Ju-Hee Kim: Department of Future Energy Convergence, College of Creativity and Convergence Studies, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea
Young-Kuk Kim: Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea
Seung-Hoon Yoo: Department of Future Energy Convergence, College of Creativity and Convergence Studies, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea

Energies, 2023, vol. 16, issue 4, 1-14

Abstract: The South Korean government plans to switch from a centralized power generation method to a distributed one. However, due to opposition from local residents, construction of distributed power plants is frequently delayed or suspended. This study attempts to investigate whether proximity to a power plant negatively affects housing property values, using the hedonic pricing technique and quantitatively analyzing the level of impact. To this end, 2291 apartment sales data from a specific city in the South Korean Seoul Metropolitan area with a power plant were used. As a result of the analysis, it was found that proximity to a power plant had a negative effect on apartment prices, which was statistically significant at the significance level of 5%. The difference in apartment prices per 1 km direct distance from the power plant to the apartment was derived as KRW 8 million (USD 7.1 thousand). This value is about 0.7% of the average price of apartments in the area (KRW 1102 million = USD 0.98 thousand). The results of this study can be used as a useful reference when the government determines the size of subsidies for local residents near power plants.

Keywords: power plant; distributed energy; housing property value; hedonic price technique (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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