An Analysis of the Impact of Multiple Environmental Goods on House Prices

Katherine Kiel () and Michael Williams
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Katherine Kiel: Department of Economics, College of the Holy Cross
Michael Williams: Department of Economics, College of the Holy Cross

No 505, Working Papers from College of the Holy Cross, Department of Economics

Abstract: It seems an established empirical fact that Superfund sites lower local property values. Two recent literature reviews (Farber, 1998, Boyle and Kiel, 2001) report that published academic papers on the topic verify that point. The EPA’s approach assumes that all sites negatively impact property values, and that the impact is similar for all sites. This paper examines 74 National Priorities List (NPL) sites in 13 U.S. counties in order to test these two implicit assumptions. Following the hedonic approach of Kiel (1995) and Kiel and McClain (1995), we find that some sites have the expected negative impact, while other sites have either no impact or a positive impact on local property values. We also consider the possibility of ‘stigma’ from sites by looking at those sites that have been cleaned during our sample period and find that some sites do appear to suffer from stigma, while others do not. We then use a meta-analysis approach to examine what factors affect the likelihood and extent of a decrease in property values near the sites. We find that larger sites in areas with fewer blue-collar workers are more likely to have the expected negative impact on local house prices.

Keywords: Environment; Superfund; Hedonic regressions; meta-analysis; property values (search for similar items in EconPapers)
JEL-codes: Q51 Q53 Q58 R21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-env, nep-geo, nep-res and nep-ure
Date: 2005-03
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Published in Journal of Urban Economics, Vol. 61:1, January 2007, pp. 170-192.

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