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The Impact of Industrial Sites on Residential Property Values

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  • Friso de Vor

    (VU University Amsterdam)

  • Henri L.F. de Groot

    (VU University Amsterdam)

Abstract

This discussion paper resulted in a publication in 'Regional Studies' 45(5), 609-23. Industrial sites cause several negative externalities, such as traffic noise disturbance, congestion, and obstruction of view. In order to quantify the negative effects stemming from industrial sites, we estimate – using a hedonic pricing model – the impact of distance to industrial sites on residential property values. We use data on houses sold in the Randstad region and the province of Noord-Brabant (both located in the Netherlands) in the year 2005, together with data on characteristics of a substantial number of industrial sites in the same regions and period. The results reveal that the distance to an industrial site has a statistically significant negative effect on the value of residential properties. However, the effect is largely localized within a relatively short distance from the nearest industrial site. Furthermore, we obtain statistical evidence for substantial localized price differentials, which vary according to the size of an industrial site.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-035/3.

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Date of creation: 00 0000
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Handle: RePEc:dgr:uvatin:20090035

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Related research

Keywords: industrial sites; negative externalities; hedonic pricing;

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References

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  1. Boxall, Peter C. & Chan, Wing H. & McMillan, Melville L., 2005. "The impact of oil and natural gas facilities on rural residential property values: a spatial hedonic analysis," Resource and Energy Economics, Elsevier, Elsevier, vol. 27(3), pages 248-269, October.
  2. Jan Rouwendal & Willemijn Weijschede- v.d. Straaten, 2008. "The costs and benefits of providing open space in cities," CPB Discussion Paper 98, CPB Netherlands Bureau for Economic Policy Analysis.
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  5. Kiel, Katherine & Zabel, Jeffrey, 2001. "Estimating the Economic Benefits of Cleaning Up Superfund Sites: The Case of Woburn, Massachusetts," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 22(2-3), pages 163-84, March-May.
  6. Dennis Kaufman & Norman Cloutier, 2006. "The Impact of Small Brownfields and Greenspaces on Residential Property Values," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 33(1), pages 19-30, August.
  7. Linneman, Peter, 1981. "The demand for residence site characteristics," Journal of Urban Economics, Elsevier, vol. 9(2), pages 129-148, March.
  8. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2005. "Impact of railway station on Dutch residential housing market," ERSA conference papers ersa05p748, European Regional Science Association.
  9. Jasper Dekkers & Willemijn van der Straaten, 2008. "Monetary Valuation of Aircraft Noise," Tinbergen Institute Discussion Papers, Tinbergen Institute 08-064/3, Tinbergen Institute.
  10. Larry Dale & James C. Murdoch & Mark A. Thayer & Paul A. Waddell, 1999. "Do Property Values Rebound from Environmental Stigmas? Evidence from Dallas," Land Economics, University of Wisconsin Press, vol. 75(2), pages 311-326.
  11. Palmquist, Raymond B., 2006. "Property Value Models," Handbook of Environmental Economics, Elsevier, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 16, pages 763-819 Elsevier.
  12. Piet Rietveld & Alfred J Wagtendonk, 2004. "The location of new residential areas and the preservation of open space: experiences in the Netherlands," Environment and Planning A, Pion Ltd, London, vol. 36(11), pages 2047-2063, November.
  13. Hite, Diane, et al, 2001. "Property-Value Impacts of an Environmental Disamenity: The Case of Landfills," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 22(2-3), pages 185-202, March-May.
  14. Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, Elsevier, vol. 24(1), pages 1-14, January.
  15. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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Citations

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Cited by:
  1. Niels Vermeer & Wouter Vermeulen, 2011. "External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis," CPB Discussion Paper 178, CPB Netherlands Bureau for Economic Policy Analysis.
  2. Stefania Tonin & Margherita Turvani, 2011. "Environmental contamination and industrial real estate market: an application of hedonic price method in Italy," ERSA conference papers ersa10p511, European Regional Science Association.

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