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A Valuation of Restored Streams Using Repeat Sales and Instrumental Variables

Author

Listed:
  • Charles Towe

    (University of Connecticut)

  • H. Allen Klaiber

    (The Ohio State University)

  • Joe Maher

    (US Government Accountability Office)

  • Will Georgic

    (Ohio Wesleyan University)

Abstract

Urban streams provide use and non-use value to local stakeholders and distant beneficiaries, alike, and play a critical role in maintaining ecosystem health. Due to dense residential development and associated stormwater infrastructure, the services these streams provide are at risk and likely to degrade as additional urban growth occurs. To combat degraded stream services and improve environmental quality, significant efforts to restore impaired streams are increasingly common. However, these restorations are costly, making estimates of the associated benefits critical to evaluating restoration policies. Using a repeat sales approach and instrumenting for the endogeneity of site selection we provide causal evidence of housing value capitalization of stream restoration projects to nearby property values. We find a local average treatment effect of 11% in property appreciation for our most inclusive distance buffer and show that ignoring endogenous assignment of restoration leads to bias on the scale of an order of magnitude in these estimates.

Suggested Citation

  • Charles Towe & H. Allen Klaiber & Joe Maher & Will Georgic, 2021. "A Valuation of Restored Streams Using Repeat Sales and Instrumental Variables," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(2), pages 199-219, October.
    • Handle: RePEc:kap:enreec:v:80:y:2021:i:2:d:10.1007_s10640-021-00575-9
    DOI: 10.1007/s10640-021-00575-9
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