Hazardous Waste Hits Hollywood: Superfund and Housing Prices in Los Angeles

Ralph Mastromonaco ()

Environmental & Resource Economics, 2014, vol. 59, issue 2, 207-230

Abstract: This paper contributes to the ongoing debate concerning the effect of various actions taken by the U.S. Environmental Protection Agency under CERCLA, commonly known as the Superfund Program, on housing prices. This study uses a housing transaction panel dataset encompassing the five major counties of the Los Angeles Combined Statistical Area to estimate the program’s influence on the local housing market. Using house and time-varying census tract fixed effects, I am able to avoid many of the endogeneity problems seen in previous research attempting to measure the Superfund treatment effect. An estimate of the effect on housing prices is given for each of the major events that occur under a typical Superfund remediation. After controlling for confounding correlated unobservables, I find a 7.3 % increase in sales price for houses within 3 km of a site that moves through the complete Superfund program. The analysis gives evidence of positive price appreciation for housing markets and serves as a lower bound for measuring remediation benefits. Copyright Springer Science+Business Media Dordrecht 2014

Keywords: Superfund; Housing market; Unobserved heterogeneity; Hazardous waste; Hedonic regression; Fixed effects (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10640-013-9725-0

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