Clean Electricity, Dirty Electricity: The Effect on Local House Prices

Piet Eichholtz, Nils Kok, Mike Langen () and Daan Vulpen
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Piet Eichholtz: Maastricht University
Nils Kok: Maastricht University
Mike Langen: University of Reading

The Journal of Real Estate Finance and Economics, 2023, vol. 66, issue 4, No 1, 743-777

Abstract: Abstract Renewable energy production is one of the most important policy instruments to fight climate change. However, despite global benefits, renewable energy production entails some local challenges, such as requiring more space per unit production capacity. In this paper, we study the external effects of large-scale conventional and renewable electric power generation facilities on local house prices. We combine information of all coal, gas, and biomass plants, as well as all wind turbines in the Netherlands, with 1.5 million housing transactions over a period of 30 years. Using a difference-in-difference as well as a repeated sales model, we study the effects of facility openings and closings. Our results show negative external price effects for gas plants and wind turbines, but positive effects for biomass plants, conditionally upon ex-ante lower priced locations. The external effects of power generating facilities on local housing markets are important to consider, especially with the current focus of public policies on the expansion of renewable energy generation. Our paper is one of the first to present a large-scale study, using detailed information, and comparing several different energy sources in one framework.

Keywords: Renewable energy; Wind power; Coal plants; Housing markets; Residential real estate (search for similar items in EconPapers)
JEL-codes: O13 Q42 Q43 Q51 R31 R52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11146-021-09878-6

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