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The impacts of underground petroleum releases on a homeowner's decision to sell: A difference-in-differences approach

Dennis Guignet and Adan Martinez-Cruz ()

Regional Science and Urban Economics, 2018, vol. 69, issue C, 11-24

Abstract: Actual and perceived damages from environmental disamenities can disrupt a utility maximizing household's otherwise optimal decision of when to sell their home. This study examines this relatively under-investigated topic with an empirical application to petroleum releases from leaking underground storage tanks, like those commonly found at gas stations. The ubiquity and relative homogeneity of this disamenity facilitates a difference-in-differences methodology. The results reveal that the timing of home sales is impacted by leak and cleanup events at these disamenities; leading to both selling sooner and delaying a sale, depending on the event, presence of the primary exposure pathway, and the quality of the home. The implications of these results are discussed.

Keywords: Housing market; Property transaction; Discrete time duration model; Underground storage tank; Groundwater contamination (search for similar items in EconPapers)
JEL-codes: D62 I18 Q51 Q53 R2 (search for similar items in EconPapers)
Date: 2018
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Working Paper: The Impacts of Underground Petroleum Releases on a Homeowner's Decision to Sell: A Difference-in-Differences Approach (2016) Downloads
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