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Impact of biogas plants on rural residential property values and implications for local acceptance

Kahsay Haile Zemo, Toke Emil Panduro and Mette Termansen

Energy Policy, 2019, vol. 129, issue C, 1121-1131

Abstract: In this paper, we investigate the impact of large- and farm-scale biogas plants on the rural residential property values. We use data from 11,279 rural housing transactions in the period 2007–2015 and trace spatial effects of biogas plants on the local property market. Our results show that large biogas plants have a significant negative impact on rural residential property values while farm-scale biogas plants have a significant positive impact. The findings suggest that preferences for or against biogas plants cannot be explained by either a NIMBY or a PIMBY phenomenon and the paper explores potential reasons for the observed disparity in valuation of farm- and large-scale biogas plants. An economic impact assessment of the choice of facility type, based on a concrete case study, indicates that the impact on residential property values may tip the scale in favor of farm-scale biogas plants. Based on these results, policy implications for planning and expansion of biogas production are discussed.

Keywords: Hedonic pricing method; Biogas; Local acceptance; Spatial generalized additive model; Capitalization effect (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.enpol.2019.03.008

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Handle: RePEc:eee:enepol:v:129:y:2019:i:c:p:1121-1131