Lead Pipes, Prescriptive Policy and Property Values

Adam Theising ()
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Adam Theising: University of Wisconsin-Madison

Environmental & Resource Economics, 2019, vol. 74, issue 3, No 17, 1355-1382

Abstract: Abstract Several recent incidences of severe waterborne lead exposure have public authorities and communities across the US rethinking their strategies to address aging water infrastructure. One common question: who should pay for updates? This paper provides evidence of positive property value capitalization effects following remediation of private lead service lines in Madison, WI. Using a 16-year panel of property transactions data and a universal and prescriptive policy change, I identify an average post-replacement price effect on the order of 3–4% of a property’s value. This implies a more than 75% average return on public and private remediation costs, suggesting homeowners strongly value the benefits of lead reduction in publicly supplied drinking water.

Keywords: Lead pollution; Water quality; Hedonic valuation; Diff-in-diff; Property value (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10640-019-00372-5

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