What Do Property Values Really Tell Us? A Hedonic Study of Underground Storage Tanks

Dennis Guignet

No 280904, National Center for Environmental Economics-NCEE Working Papers from United States Environmental Protection Agency (EPA)

Abstract: Hedonic property value models are widely used, but are susceptible to omitted variable bias and potentially invalid conjectures regarding the assumed measure of environmental quality. This paper focuses on an application where both are of particular concern: leaking underground storage tanks. I estimate a hedonic model using quasi-experimental and spatial econometric techniques. Similar to previous studies, I examine how house prices vary with distance to the disamenity. This approach yields little evidence that prices are adversely impacted. However, to better measure risks, I utilize home-specific data on correspondence from environmental regulators, and find a 9-12% depreciation when households are well-informed.

Keywords: Environmental Economics and Policy; Health Economics and Policy (search for similar items in EconPapers)
Pages: 60
Date: 2012-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nceewp:280904

DOI: 10.22004/ag.econ.280904

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