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Hog Barns and Neighboring House Prices: Anticipation and Post‐Establishment Impacts

Chad Lawley

American Journal of Agricultural Economics, 2021, vol. 103, issue 3, 1099-1121

Abstract: The impact of large‐scale hog barns on residential property values is at the forefront of local concerns about livestock development. In this article, I examine the impact of hog barns on house prices in an intensive production region of Manitoba, Canada. Timing of barn establishment and precise locations of houses and barns are used to gain a better understanding of the dynamic impacts of hog barns on house prices. I find that houses within 2 km of a hog barn sell for 5.7% less than similar houses located a little farther away from a barn. Quasi‐myopic specifications indicate that house prices fall by 6.2% up to three years prior to barn establishment, consistent with market anticipation of the future location of hog barns. Accounting for anticipation increases the post‐establishment discount to 8%, suggesting that ignoring anticipation of new barn establishment biases estimated post‐establishment impacts downwards.

Date: 2021
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https://doi.org/10.1111/ajae.12203

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