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The Adverse Impact of Particulate Matter on Property Values

Mark P. Berkman (), Kyle J. Hubbard () and Timothy H. Savage ()
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Mark P. Berkman: The Brattle Group ¡V 201 Mission Street, Suite 2800, San Francisco, CA 94105
Kyle J. Hubbard: The Brattle Group - 201 Mission Street, Suite 2800, San Francisco, CA 94105
Timothy H. Savage: Finance Scholars Group ¡V 675 Third Avenue, 18th Floor, New York, NY 10017

International Real Estate Review, 2012, vol. 15, issue 2, 215-230

Abstract: Recent litigation with regards to property damage associated with carbon black emissions provides an opportunity to measure the impact of particulate matter (PM), a Clean Air Act pollutant. By using property-specific PM concentrations, we estimate the impact of PM on residential property values, which accounts for relevant characteristics and multiple pollution sources. This study simultaneously incorporates all important econometric modeling features cited in the prior literature. We find that a 10-percent increase in PM concentration results in a statistically-significant 1.1-percent decrease in value. In 2007 dollars, a one-standard deviation increase in PM concentration results in a statistically-significant reduction of approximately $4,800.

Keywords: Corporate real estate; Capital structure; Stock performance (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2012
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International Real Estate Review is currently edited by Professor Ko Wang, Professor Hongyu Liu and Professor Rose Neng Lai

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