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Valuing the Benefits of Superfund Site Remediation: Three Approaches to Measuring Localized Externalities

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  • Shanti Gamper-Rabindran
  • Ralph Mastromonaco
  • Christopher Timmins
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    Abstract

    We apply three complementary approaches designed to identify the localized effects of Superfund site remediation under the CERCLA, examining data at the level of (i) the census tract (paying attention to within tract heterogeneity), (ii) the census block, and (iii) individual house transaction. Our analysis of the within-tract housing value distribution detects statistically and economically significant appreciation in the lower tails resulting from hazardous waste cleanup; deletion of a site raises tract-level housing values by 18.2% at the 10th percentile, 15.4% at the median, and 11.4% at the 60th percentile. These tract results are confirmed by (i) house transaction data that show cheaper houses within each tract are more likely to be exposed to waste sites within one kilometer, explaining their greater appreciation from site cleanup, and (ii) high-resolution census block data that show greater appreciation among blocks lying closer to the cleaned sites. House-level repeat-sales data confirm results from our national level census analysis by showing that deletion raises housing values relative to proposal in specific markets, such as northern New Jersey, but they also uncover a great heterogeneity in the effects of remediation across markets, with no statistical effects from deletion relative to proposal detected in Los Angeles metro, southwestern Connecticut or Boston metro.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16655.

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    Date of creation: Jan 2011
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    Handle: RePEc:nbr:nberwo:16655

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    1. Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, vol. 24(1), pages 1-14, January.
    2. Hanna, Brid Gleeson, 2007. "House values, incomes, and industrial pollution," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 100-112, July.
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    Cited by:
    1. Kelly D. Edmiston, 2012. "Nonprofit housing investment and local area home values," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 67-96.
    2. Kevin Haninger & Lala Ma & Christopher Timmins, 2014. "The Value of Brownfield Remediation," NBER Working Papers 20296, National Bureau of Economic Research, Inc.
    3. Nicholas J. Sanders, 2012. "Toxic Assets: How the Housing Market Responds to Environmental Information Shocks," Working Papers 128, Department of Economics, College of William and Mary.
    4. H. Spencer Banzhaf & Omar Farooque, 2012. "Interjurisdictional Housing Prices and Spatial Amenities: Which Measures of Housing Prices Reflect Local Public Goods?," NBER Working Papers 17809, National Bureau of Economic Research, Inc.

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