Disentangling Property Value Impacts of Environmental Contamination from Locally Undesirable Land Uses: Implications for Measuring Post-Cleanup Stigma

Laura Taylor, Daniel J. Phaneuf and Xiangping Liu

No 264975, CEnREP Working Papers from North Carolina State University, Department of Agricultural and Resource Economics

Abstract: This research seeks to identify the impact of environmental contamination on residential housing prices separate from land use externalities associated with the contaminated sites. This is possible in an empirical model that considers the influence of uncontaminated commercial properties on home values concurrently with contaminated property influences. Our approach addresses an important source of omitted variable bias that has not been fully recognized in the literature, and it allows identification of stigma effects in a way not possible in past studies. We estimate difference-in-differences models that pool observations across a metro area and across time, as well as repeat sales models that rely on multiple transactions per home. Results indicate that environmental contamination more than doubles the negative influence commercial properties have on neighboring residential home values. Furthermore, we find little evidence of stigma effects once a contaminated site is remediated. The negative spillover effects associated with remediated contaminated sites are largely indistinguishable from the spillover effects from commercial properties with no known contamination.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 43
Date: 2016-03-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/264975/files/WP-2016-019.pdf (application/pdf)
https://ageconsearch.umn.edu/record/264975/files/WP-2016-019.pdf?subformat=pdfa (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nccewp:264975

DOI: 10.22004/ag.econ.264975

Access Statistics for this paper

More papers in CEnREP Working Papers from North Carolina State University, Department of Agricultural and Resource Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().