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Renewable energy and negative externalities: The effect of wind turbines on house prices

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  • Dröes, Martijn I.
  • Koster, Hans R.A.

Abstract

In many countries, wind turbines are constructed as part of a strategy to reduce dependence on fossil fuels. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby houses. A unique Dutch house price dataset covering the period 1985–2011 is used, as well as the exact location of all wind turbines that were built in the Netherlands. Using a difference-in-differences methodology we find a 1.4% price decrease for houses within 2km of a turbine. There is also evidence for anticipation effects a few years before placement of a turbine. The effect is larger for taller turbines and in urban areas. Especially the first turbine built close to a house has a negative effect on its price.

Suggested Citation

  • Dröes, Martijn I. & Koster, Hans R.A., 2016. "Renewable energy and negative externalities: The effect of wind turbines on house prices," Journal of Urban Economics, Elsevier, vol. 96(C), pages 121-141.
    • Handle: RePEc:eee:juecon:v:96:y:2016:i:c:p:121-141
    DOI: 10.1016/j.jue.2016.09.001
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    More about this item

    Keywords

    Renewable energy; Wind turbines; Externalities; House prices;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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