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Improving Water Quality in an Iconic Estuary: An Internal Meta-analysis of Property Value Impacts Around the Chesapeake Bay

Author

Listed:
  • Heather Klemick

    (US Environmental Protection Agency)

  • Charles Griffiths

    (US Environmental Protection Agency)

  • Dennis Guignet

    (US Environmental Protection Agency)

  • Patrick Walsh

    (Landcare Research)

Abstract

This study conducts a meta-analysis and benefit transfer of the value of water clarity in the Chesapeake Bay estuary to estimate the property value impacts of pollution reduction policies. Estimates of the value of water clarity are derived from separate hedonic property value analyses of 14 counties bordering the Bay. The meta-analysis allows us to: (1) estimate the average effect of water clarity in the Chesapeake Bay, (2) investigate heterogeneity of effects across counties based on socioeconomic and ecological factors, (3) evaluate different measures of water clarity used in the original hedonic equations, and (4) transfer the values to Bayfront counties in nearby jurisdictions to estimate the property value impacts of the total maximum daily load (TMDL), a policy to reduce nutrient and sediment pollution entering the Bay that is expected to improve water clarity and ecological health. We also investigate the in-sample and out-of-sample predictive power of different transfer strategies and find that a simpler unit value transfer can outperform more complex function transfers. We estimate that aggregate near-waterfront property values could increase by roughly $400–$700 million in response to water clarity improvements from the TMDL.

Suggested Citation

  • Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2018. "Improving Water Quality in an Iconic Estuary: An Internal Meta-analysis of Property Value Impacts Around the Chesapeake Bay," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 265-292, February.
    • Handle: RePEc:kap:enreec:v:69:y:2018:i:2:d:10.1007_s10640-016-0078-3
    DOI: 10.1007/s10640-016-0078-3
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    2. Sarah Nicholls & John Crompton, 2018. "A Comprehensive Review of the Evidence of the Impact of Surface Water Quality on Property Values," Sustainability, MDPI, vol. 10(2), pages 1-30, February.
    3. Moore, Michael R. & Doubek, Jonathan P. & Xu, Hui & Cardinale, Bradley J., 2020. "Hedonic Price Estimates of Lake Water Quality: Valued Attribute, Instrumental Variables, and Ecological-Economic Benefits," Ecological Economics, Elsevier, vol. 176(C).
    4. Hood, Raleigh R. & Shenk, Gary W. & Dixon, Rachel L. & Smith, Sean M.C. & Ball, William P. & Bash, Jesse O. & Batiuk, Rich & Boomer, Kathy & Brady, Damian C. & Cerco, Carl & Claggett, Peter & de Mutse, 2021. "The Chesapeake Bay program modeling system: Overview and recommendations for future development," Ecological Modelling, Elsevier, vol. 456(C).
    5. David Wolf & Sathya Gopalakrishnan & H. Allen Klaiber, 2022. "Staying afloat: The effect of algae contamination on Lake Erie housing prices," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1701-1723, October.
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    7. Richard C. Bishop & Kevin J. Boyle, 2021. "On Adding-Up as a Validity Criterion for Stated-Preference Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(3), pages 587-601, November.
    8. Marvin Schütt, 2021. "Systematic Variation in Waste Site Effects on Residential Property Values: A Meta-Regression Analysis and Benefit Transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(3), pages 381-416, March.
    9. Kovacs, Kent & West, Grant & Nowak, David J. & Haight, Robert G., 2022. "Tree cover and property values in the United States: A national meta-analysis," Ecological Economics, Elsevier, vol. 197(C).

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    More about this item

    Keywords

    Meta-analysis; Benefit transfer; Water quality; Chesapeake Bay; Hedonic property value; Total Maximum Daily Load; TMDL;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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