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Perceived Environmental Risk, Media and Residential Sales Prices

Julia Freybote () and Eric Fruits ()
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Julia Freybote: Portland State University
Eric Fruits: Portland State University

Journal of Real Estate Research, 2015, vol. 37, issue 2, 217-244

Abstract: We investigate the relationship of homebuyer risk perception and sales prices over different development stages of an environmental hazard (underground natural gas transmission pipeline) characterized by no sensory impact on homes, no accidents and a relatively low actual risk of fatal explosions. We also investigate the moderating effect of media coverage of unrelated fatal pipeline explosions on this relationship. Using a hedonic pricing model, we find that 1) media coverage moderates the relationship of pipeline proximity (perceived risk) and sales prices in the pipeline construction phase and 2) higher perceived risk reduces sales prices once the pipeline is in operation.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2015
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More articles in Journal of Real Estate Research from American Real Estate Society American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323.
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