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I can hear my neighbors' fracking: The effect of natural gas production on housing values in Tarrant County, TX

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  • Balthrop, Andrew T.
  • Hawley, Zackary

Abstract

In this study we estimate the effect of hydraulically fractured natural gas wells on residential real estate prices. We exploit variation in distance to nearby gas wells in home sale prices to estimate this effect. In contrast to previous studies, we focus on a relatively densely populated area, a section of the Dallas–Ft. Worth–Arlington urban area. Using a dataset of 127,556 observations from Tarrant County, Texas over the period 2005–2011, we find robust evidence that increased proximity to a well leads to reduced home sale prices. Existence of wells within 3500ft of a property reduces property values by approximately 1.5–3%. We demonstrate that the reduction seems to be driven by unconventional rather than conventional wells, and that well construction causes an added 1–2% reduction in home value.

Suggested Citation

  • Balthrop, Andrew T. & Hawley, Zackary, 2017. "I can hear my neighbors' fracking: The effect of natural gas production on housing values in Tarrant County, TX," Energy Economics, Elsevier, vol. 61(C), pages 351-362.
  • Handle: RePEc:eee:eneeco:v:61:y:2017:i:c:p:351-362
    DOI: 10.1016/j.eneco.2016.11.010
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    References listed on IDEAS

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    Cited by:

    1. Brown, Jason, 2017. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Research Working Paper RWP 17-5, Federal Reserve Bank of Kansas City.
    2. repec:eee:enepol:v:106:y:2017:i:c:p:345-355 is not listed on IDEAS

    More about this item

    Keywords

    Hydraulic fracturing; Spatial dependence; Hedonic valuation;

    JEL classification:

    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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