Forever Chemicals in the "Chemical Capital of the World": The Impact of Perceived Drinking Water Contamination on Property Values

Eleanor Harrison, Sachin Badole and Martin Heintzelman

No 404485, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Perceived contamination of drinking water resources from per-and polyfluoroalkyl substances (PFAS) can act as an environmental disamenity for homeowners. This study evaluates the impact of nearby PFAS contamination of drinking water resources on property values in the entire state of Delaware, which has recorded instances of PFAS contamination in water resources since 2009. We build upon previous work to define contamination and knowledge of contamination based on classifications of the level of potential harm to human health, and the timing of water testing relative to the timing of home transactions. Our spatial analysis utilizes over 400 unique PFAS detections in surface and groundwater from 2009 to 2024, and statewide residential transactions that occurred from 2005 to 2025. We employ a hedonic difference-in-differences framework that uses a heterogeneous household-level definition of knowledge of and exposure to nearby contamination as an exogenous shock to the housing market, as well as spatial and temporal fixed effects. Results using this approach demonstrate no significant effect of nearby contamination on property values on average. However, in some specifications where we disaggregate treatment effects by treatment year, we find statistically significant declines in property values for tests conducted in 2022. Our findings contribute to the ongoing discussion of PFAS regulation efforts for drinking water resources.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 58
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404485

DOI: 10.22004/ag.econ.404485

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