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Living with Hogs in Iowa: The Impact of Livestock Facilities on Rural Residential Property Values

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To better understand the magnitude of the effects of livestock feeding operations on residential property values, we constructed a new dataset that merges data on home sales with data on the location and size of livestock feeding operations in five rural counties of Iowa. We estimated a hedonic model to explain variations in residential sales price with standard house attributes, such as number of bedrooms and square feet of living space, as well as the effects of distance and density of livestock feeding operation. We find that livestock operations have an overall statistically significant effect on property values. Predicted negative effects are largest for properties that are downwind and close to livestock operations. In addition, feeding operations that are moderate in size have more impact than do large-scale operations, most likely reflecting age, type, and management practices of the moderate-sized operations. The limited size of the estimated effects suggest that common sense rules—such as not locating feeding operations close to and upwind of residences—combined with modest compensatory payments could help rural residences co-exist with modern feeding operations.

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Bibliographic Info

Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 03-wp342.

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Date of creation: Aug 2003
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Handle: RePEc:ias:cpaper:03-wp342

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Keywords: hedonic model; livestock; property values.;

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  1. Ready, Richard C. & Abdalla, Charles W., 2003. "The Amenity And Disamenity Impacts Of Agriculture: Estimates From A Hedonic Pricing Model In Southeastern Pennsylvania," 2003 Annual meeting, July 27-30, Montreal, Canada, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 22196, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. 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..
  3. McCluskey, Jill & Rausser, Gordon C., 2000. "Estimation of perceived risk and its effect on property values," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series, Department of Agricultural & Resource Economics, UC Berkeley qt46x0r71b, Department of Agricultural & Resource Economics, UC Berkeley.
  4. Taff, Steven J. & Tiffany, Douglas G. & Weisberg, Sanford, 1996. "Measured Effects Of Feedlots On Residential Property Values In Minnesota: A Report To The Legislature," Staff Papers, University of Minnesota, Department of Applied Economics 14121, University of Minnesota, Department of Applied Economics.
  5. Katherine A. Kiel, 1995. "Measuring the Impact of the Discovery and Cleaning of Identified Hazardous Waste Sites on House Values," Land Economics, University of Wisconsin Press, vol. 71(4), pages 428-435.
  6. Smith, V Kerry & Desvousges, William H, 1986. "The Value of Avoiding a Lulu: Hazardous Waste Disposal Sites," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 293-99, May.
  7. Kohlhase, Janet E., 1991. "The impact of toxic waste sites on housing values," Journal of Urban Economics, Elsevier, vol. 30(1), pages 1-26, July.
  8. Alan K. Reichert & Michael Small & Sunil Mohanty, 1992. "The Impact of Landfills on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, American Real Estate Society, vol. 7(3), pages 297-314.
  9. Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, Elsevier, vol. 24(1), pages 1-14, January.
  10. Raymond B. Palmquist & Fritz M. Roka & Tomislav Vukina, 1997. "Hog Operations, Environmental Effects, and Residential Property Values," Land Economics, University of Wisconsin Press, vol. 73(1), pages 114-124.
  11. Smith, V Kerry & Huang, Ju-Chin, 1995. "Can Markets Value Air Quality? A Meta-analysis of Hedonic Property Value Models," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(1), pages 209-27, February.
  12. Mark Thayer & Heidi Albers & Morteza Rahmatian, 1992. "The Benefits of Reducing Exposure to Waste Disposal Sites: A Hedonic Housing Value Approach," Journal of Real Estate Research, American Real Estate Society, American Real Estate Society, vol. 7(3), pages 265-282.
  13. 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.
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Cited by:
  1. Eyckmans, Johan & De Jaeger, Simon & Rousseau, Sandra, 2011. "Hedonic valuation of odor nuisance using field measurements, a case study of an animal waste processing facility in Flanders," Working Papers, Hogeschool-Universiteit Brussel, Faculteit Economie en Management 2011/19, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  2. Jungik Kim & Peter Goldsmith & Michael Thomas, 2010. "Economic impact and public costs of confined animal feeding operations at the parcel level of Craven County, North Carolina," Agriculture and Human Values, Springer, Springer, vol. 27(1), pages 29-42, March.
  3. Christophe Bontemps & Michel Simioni & Yves Surry, 2008. "Semiparametric hedonic price models: assessing the effects of agricultural nonpoint source pollution," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 23(6), pages 825-842.
  4. Hodge, Timothy R., 2011. "The Effect of Ethanol Plants on Residential Property Values: Evidence from Michigan," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, Mid-Continent Regional Science Association, vol. 41(2).
  5. Peter Goldsmith & Filipe Pereira, 2014. "Outlining a strategic legitimacy assessment method: the case of the Illinois livestock industry," Agriculture and Human Values, Springer, Springer, vol. 31(2), pages 215-230, June.
  6. Nehring, Richard F. & Fernandez-Cornejo, Jorge, 2005. "The Impacts of Off-Farm Income on Farm Efficiency, Scale, and Profitability for Corn Farms," 2005 Annual meeting, July 24-27, Providence, RI, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 19566, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Alexander E. Saak, 2003. "Spatial Arrangements of Externality Generating and Receiving Activities," Food and Agricultural Policy Research Institute (FAPRI) Publications, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University 03-wp348, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  8. Bontemps, Christophe & Simioni, Michel & Surry, Yves R., 2005. "Hedonic Housing Prices and Agricultural Pollution: An Empirical Investigation on Semiparametric Models," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark, European Association of Agricultural Economists 24709, European Association of Agricultural Economists.
  9. Ran, Tao & Zhao, Jinhua, 2005. "Impacts of Livestock Operations: A Gaussian Dispersion Hedonic Approach," 2005 Annual meeting, July 24-27, Providence, RI, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 19116, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Dayton Lambert & Christopher Clark & Michael Wilcox & Seong-Hoon Cho, 2011. "Distance, density, local amenities, and suburban development preferences in a rapidly growing East Tennessee county," Agriculture and Human Values, Springer, Springer, vol. 28(4), pages 519-532, December.
  11. Larue, S. & Abildtrup, Jens & Schmitt, Bertrand, 2008. "Modelling the Spatial Structure of Pig Production in Denmark," 2008 International Congress, August 26-29, 2008, Ghent, Belgium, European Association of Agricultural Economists 44281, European Association of Agricultural Economists.
  12. Bayoh, Isaac & Irwin, Elena G. & Roe, Brian E., 2004. "The Value Of Clean Dairy Air: Accounting For Endogeneity And Spatially Correlated Errors In A Hedonic Analyses Of The Impact Of Animal Operations On Local Property Values," 2004 Annual meeting, August 1-4, Denver, CO, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 20364, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Jungik Kim & Peter Goldsmith, 2009. "A Spatial Hedonic Approach to Assess the Impact of Swine Production on Residential Property Values," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 42(4), pages 509-534, April.
  14. Robert Deacon & Felix Schläpfer, 2010. "The Spatial Range of Public Goods Revealed Through Referendum Voting," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 47(3), pages 305-328, November.
  15. Michael Brady & Elena Irwin, 2011. "Accounting for Spatial Effects in Economic Models of Land Use: Recent Developments and Challenges Ahead," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 48(3), pages 487-509, March.
  16. Fernandez-Cornejo, Jorge & Nehring, Richard F. & Erickson, Kenneth W., 2007. "Off-Farm Work and Economic Performance: Comparing Crop and Livestock Farms," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 9904, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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