Stigmatized asset value: is it temporary or permanent?

Jill McCluskey and Gordon Rausser

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: Stigma is a negative attribute of real estate acquired by the discovery of contamination and reflected in its value (Elliot-Jones, 1996). Using a theoretical model with external economies and adjustment costs, we show that both temporary stigma and permanent stigma are possible equilibrium outcomes after the discovery and cleanup of a hazardous waste site. The existence and duration of stigma are examined using hedonic price techniques with data from housing sales prices in Dallas County, Texas. The empirical evidence shows that stigma exists after cleanup only for properties in very close proximity to the hazardous waste site.

Keywords: hazardous waste. equilibrium (economics); land valuation; prices; real estate; risk; Social and Behavioral Sciences (search for similar items in EconPapers)
Date: 1999-06-01
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Citations: View citations in EconPapers (4)

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Working Paper: Stigmatized Asset value: Is It Temporary or Permanent? (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:agrebk:qt59b1t566

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