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I can hear my neighbors' fracking: The effect of natural gas production on housing values in Tarrant County, TX

Andrew T. Balthrop and Zackary Hawley

Energy Economics, 2017, vol. 61, issue C, 351-362

Abstract: In this study we estimate the effect of hydraulically fractured natural gas wells on residential real estate prices. We exploit variation in distance to nearby gas wells in home sale prices to estimate this effect. In contrast to previous studies, we focus on a relatively densely populated area, a section of the Dallas–Ft. Worth–Arlington urban area. Using a dataset of 127,556 observations from Tarrant County, Texas over the period 2005–2011, we find robust evidence that increased proximity to a well leads to reduced home sale prices. Existence of wells within 3500ft of a property reduces property values by approximately 1.5–3%. We demonstrate that the reduction seems to be driven by unconventional rather than conventional wells, and that well construction causes an added 1–2% reduction in home value.

Keywords: Hydraulic fracturing; Spatial dependence; Hedonic valuation (search for similar items in EconPapers)
JEL-codes: Q33 Q35 R21 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.eneco.2016.11.010

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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