The Impact of Wetlands Rules on the Prices of Regulated and Proximate Houses: A Case Study

Katherine Kiel

No 707, Working Papers from College of the Holy Cross, Department of Economics

Abstract: Federal, state and local wetlands protection laws that restrict landowners’ ability to develop their properties in certain ways could decrease the value of the affected properties. However, the regulations could also give benefits to nearby neighbors who no longer need worry about increased development in their area. Given that some properties may decline in value, while others increase, the impact on individual properties must be determined empirically. This study uses a data set from Newton, Massachusetts to examine the impact of wetlands laws on the regulated properties, as well as on proximate properties. Looking at house sales data from 1988 through 2005, the hedonic technique is used to estimate the effect of wetlands regulations on single family home prices and finds that having wetlands on a property decreases its value by 4% relative to non-regulated properties. Homes that are contiguous to regulated houses do not experience any change in price. Thus it seems unlikely that neighbors are receiving any benefit from knowing that further development is restricted in their immediate vicinity.

Keywords: Environment; housing; amenities; hedonic pricing; wetlands (search for similar items in EconPapers)
JEL-codes: Q51 Q53 R2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2007-09
New Economics Papers: this item is included in nep-env and nep-ure
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https://hcapps.holycross.edu/hcs/RePEc/hcx/HC0707-Kiel_Wetlands.pdf (application/pdf)

Related works:
Working Paper: The impact of wetlands rules on the prices of regulated and proximate houses: a case study (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hcx:wpaper:0707

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