Shale Gas Development and Property Values: Differences Across Drinking Water Sources
AbstractWhile shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.
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Bibliographic InfoPaper provided by Duke University, Department of Economics in its series Working Papers with number 12-14.
Date of creation: 2012
Date of revision:
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Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
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Web page: http://econ.duke.edu/
shale gas; property values; hedonic models; groundwater; triple difference estimator;
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-06 (All new papers)
- NEP-ENE-2012-10-06 (Energy Economics)
- NEP-URE-2012-10-06 (Urban & Real Estate Economics)
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- Virginia Di Nino & Ivan Faiella, 2013. "The Â“newÂ” non-conventional hydrocarbons: the solution to the energy conundrum?," Questioni di Economia e Finanza (Occasional Papers) 205, Bank of Italy, Economic Research and International Relations Area.
- Weber, Jeremy G., 2013. "A Decade of Natural Gas Development: The Makings of a Resource Curse?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150407, Agricultural and Applied Economics Association.
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