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House prices and septic tanks: Evidence from Miami‐Dade county

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  • William Hardin
  • Zhenguo Lin
  • Mark Thibodeau

Abstract

Septic systems in low‐lying coastal areas provide a unique opportunity to identify an increasingly relevant environmental threat and test whether the risk is internalized in house prices. Using data on the roughly 120,000 septic tanks in Miami‐Dade County, Florida, and residential transactions from 2002 to 2022, we find a significant and positive association between house prices and the presence of septic tanks, suggesting that market participants and property values do not internalize the public health and environmental threat they pose. Instead, the value of an installed septic system and the corresponding reduction in operating and maintenance costs are associated with a premium of 3%. The findings complement current policy discussions, highlighting a unique setting for studying climate‐related risks where the public and property owners' interests are not aligned.

Suggested Citation

  • William Hardin & Zhenguo Lin & Mark Thibodeau, 2026. "House prices and septic tanks: Evidence from Miami‐Dade county," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 54(1), pages 144-177, January.
    • Handle: RePEc:bla:reesec:v:54:y:2026:i:1:p:144-177
    DOI: 10.1111/1540-6229.70010
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