What Do Property Values Really Tell Us? A Hedonic Study of Underground Storage Tanks

Dennis Guignet

No 201201, NCEE Working Paper Series from National Center for Environmental Economics, U.S. Environmental Protection Agency

Abstract: Hedonic property value models are widely used, but are susceptible to omitted variable bias and potentially invalid conjectures regarding the assumed measure of environmental quality. This paper focuses on an application where both are of particular concern: leaking underground storage tanks. I estimate a hedonic model using quasi-experimental and spatial econometric techniques. Similar to previous studies, I examine how house prices vary with distance to the disamenity. This approach yields little evidence that prices are adversely impacted. However, to better measure risks, I utilize home-specific data on correspondence from environmental regulators, and find a 9-12% depreciation when households are well-informed.

Keywords: hedonic analysis; housing prices; leaking underground storage tanks; LUST; contaminated sites; groundwater contamination; remediation benefits (search for similar items in EconPapers)
JEL-codes: D62 I18 Q51 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2012-03, Revised 2012-03
New Economics Papers: this item is included in nep-env and nep-ure
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Citations: View citations in EconPapers (1)

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Journal Article: What Do Property Values Really Tell Us? A Hedonic Study of Underground Storage Tanks (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:nev:wpaper:wp201201

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