Environmental Contamination and House Values: A Study of Market Adjustment
AbstractIn many communities throughout the United States, contaminated sites are identified and addressed by the Environmental Protection Agency (EPA). In each of these communities, the EPA presents a plan of action and provides the community with information about progress being made. Does the housing market adjust quickly after announcements by EPA concerning the existence and toxicity of Superfund sites? Other studies have shown that the levels of house prices fall when people suspect there is a problem, and again when the EPA announces that the site is toxic (e.g. Kiel, 1995), but how can we tell when or if the market has completely adjusted to the existence of such a site? If the site is always perceived as an externality, then the coefficient on distance from the house to the site in the hedonic regression on house values should remain statistically significant and negative. Thus merely looking at the coefficient does not aid in determining when, or if, the market has cleared.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0607.
Length: 17 pages
Date of creation: Aug 2006
Date of revision:
Contact details of provider:
Fax: (508) 793-3708
Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
hedonic models; environmental prices; housing; adjustment process;
Find related papers by 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
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-26 (All new papers)
- NEP-ENV-2006-08-26 (Environmental Economics)
- NEP-URE-2006-08-26 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, vol. 24(1), pages 1-14, January.
- Kiel Katherine A. & McClain Katherine T., 1995. "The Effect of an Incinerator Siting on Housing Appreciation Rates," Journal of Urban Economics, Elsevier, vol. 37(3), pages 311-323, May.
- McCluskey, Jill & Rausser, Gordon C., 2000.
"Hazardous waste sites and housing appreciation rates,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt0z9156qx, Department of Agricultural & Resource Economics, UC Berkeley.
- McCluskey, Jill J. & Rausser, Gordon C., 2003. "Hazardous waste sites and housing appreciation rates," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 166-176, March.
- McCluskey, Jill Jennifer & Rausser, Gordon C, 2000. "Hazardous waste sites and housing appreciation rates," CUDARE Working Paper Series 906, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Kiel Katherine A. & McClain Katherine T., 1995. "House Prices during Siting Decision Stages: The Case of an Incinerator from Rumor through Operation," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 241-255, March.
- Jill J. McCluskey & Gordon C. Rausser, 2003. "Stigmatized Asset Value: Is It Temporary or Long-Term?," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 276-285, May.
- Greenberg, M & Hughes, J, 1992. "The Impact of Hazardous Waste Superfund Sites on the Value of Houses Sold in New Jersey," The Annals of Regional Science, Springer, vol. 26(2), pages 147-53, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson).
If references are entirely missing, you can add them using this form.