Disamenity or premium: Do electricity transmission lines affect farmland values and housing prices differently?

Qinan Lu, Nieyan Cheng, Wendong Zhang and Pengfei Liu

Journal of Housing Economics, 2023, vol. 62, issue C

Abstract: A substantial increase in electricity demand has triggered a rising investment in energy infrastructure in the US over the last decade. This paper examines the capitalization effects of electricity transmission lines (TMLs) on nearby farmland values and housing prices in the Midwest from 2015 to 2019, based on 16,026 parcel-level farmland sales data from FarmlandFinder and 1,905,280 housing transaction data from the Zillow Transaction and Assessment Dataset database. Our estimation results reaffirm the disamenity effects of TMLs on housing property values and find that the disamenity effects are larger on houses in urban areas than in rural areas. Nearby TMLs generate premiums for surrounding farmland, which contrasts with the disamenity evidence due to aesthetics (either visual or audible) in the literature. We further show that farmland parcels within 0–2 km of TMLs in high-wind areas are approximately 3.10% more expensive than comparable parcels in low-wind areas. Our paper provides novel and contrarian evidence on the effects of TMLs on property values amid rising investment in energy infrastructure.

Keywords: Transmission lines (TMLs); Property values; Wind resources; Disamenity; Option values (search for similar items in EconPapers)
JEL-codes: Q15 R14 R31 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Disamenity or Premium: Do Electricity Transmission Lines Affect Farmland Values and Housing Prices Differently? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:62:y:2023:i:c:s1051137723000554

DOI: 10.1016/j.jhe.2023.101968

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