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Renewable Energy and Negative Externalities: The Effect of Wind Turbines on House Prices

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  • Martijn Droes

Abstract

In many countries, wind turbines are constructed as part of a strategy to reduce fossil fuel dependence. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby properties. Using a unique transaction price dataset covering the period 1985-2011 and the exact location of all wind turbines built in the Netherlands, we find that property prices within a 2 km radius of a wind turbine, after it has been constructed, are on average 1.4 percent lower than property prices in comparable neighborhoods. We provide further evidence that the external costs of wind turbines are at least 10 percent of construction costs.

Suggested Citation

  • Martijn Droes, 2014. "Renewable Energy and Negative Externalities: The Effect of Wind Turbines on House Prices," ERSA conference papers ersa14p1609, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa14p1609
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    More about this item

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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