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.
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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:
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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.:
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