Shale Gas Development and Property Values: Differences across Drinking Water Sources

Lucija Muehlenbachs, Elisheba Spiller and Christopher Timmins

No 18390, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.

JEL-codes: Q4 Q53 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-ene and nep-ure
Note: EEE
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Citations: View citations in EconPapers (30)

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Working Paper: Shale Gas Development and Property Values: Differences Across Drinking Water Sources (2012)
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