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Industrial Land Use, Externalities, and Residential Location

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  • James D. Burnell

    (The College of Wooster, Ohio)

Abstract

Studies using individual housing units as the observation base have not supported the hypothesis that certain nonresidential land uses have a negative impact on housing values. Basically, externalities associated with these land uses have very localized effects. Other studies, using municipalities as the observation base, have found that nonresidential land uses do reduce housing values, and suggest that there may be municipality-wide or nonlocalized externality effects. This paper extends these analyses, of nonlocalized externality effects and test the hypothesis that residential locational choice is also affected by the nonlocalized nature of externalities associated with nonresidential land use, distinguishing between the localized versus nonlocalized externalities associated with industrial land use. An empirical model is used to test this hypothesis. The results show that the concentration of industrial activity has a positive effect on housing values but that municipalities with major air polluting industries have significantly lower housing values. This suggests that the type of industrial activity, especially in relation to the type of externalities being generated, as well as the concentration of activity should be included in models determining the effectiveness of zoning.

Suggested Citation

  • James D. Burnell, 1985. "Industrial Land Use, Externalities, and Residential Location," Urban Studies, Urban Studies Journal Limited, vol. 22(5), pages 399-408, October.
    • Handle: RePEc:sae:urbstu:v:22:y:1985:i:5:p:399-408
    DOI: 10.1080/00420988520080711
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    References listed on IDEAS

    as
    1. Stull, William J, 1975. "Community Environment, Zoning, and the Market Value of Single-Family Homes," Journal of Law and Economics, University of Chicago Press, vol. 18(2), pages 535-557, October.
    2. Grether, David M. & Mieszkowski, Peter, 1980. "The effects of nonresidential land uses on the prices of adjacent housing: Some estimates of proximity effects," Journal of Urban Economics, Elsevier, vol. 8(1), pages 1-15, July.
    3. Rueter, Frederick H, 1973. "Externalities in Urban Property Markets: An Empirical Test of the Zoning Ordinance of Pittsburgh," Journal of Law and Economics, University of Chicago Press, vol. 16(2), pages 313-349, October.
    4. Maser, Steven M & Riker, William H & Rosett, Richard N, 1977. "The Effects of Zoning and Externalities on the Price of Land: An Empirical Analysis of Monroe County, New York," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 111-132, April.
    5. Lafferty, Ronald N & Frech, H E, III, 1978. "Community Environment and the Market Value of Single-Family Homes: The Effect of the Dispersion of Land Uses," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 381-394, October.
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    Cited by:

    1. Terrence M. Clauretie & Herman Li, 2019. "Land Values: Size Matters," The Journal of Real Estate Finance and Economics, Springer, vol. 58(1), pages 80-110, January.
    2. Justin M. Ross, 2013. "Are Community-Nuisance Fiscal Zoning Arrangements Undermined by State Property Tax Reforms? Evidence from Nuclear Power Plants and School Finance Equalization," Land Economics, University of Wisconsin Press, vol. 89(3), pages 449-465.

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