A hedonic analysis of the impact of LUST sites on house prices
Petroleum from leaking underground storage tanks (LUSTs) can contaminate local soil and surface and groundwater. This can pose health risks to the surrounding population. Focusing on single family home sales from 1996 to 2007 in three Maryland Counties, we use a hedonic house price model and a difference–in-difference approach to estimate the willingness to pay to clean up the LUST sites. Particular attention is given to how property values are affected by leak and cleanup activity at a LUST site, the severity of contamination, the presence of a primary exposure pathway (i.e., private groundwater wells), and publicity surrounding a LUST site. The results suggest that although the typical LUST may not significantly affect nearby property values, more publicized (and more severe) sites can decrease surrounding home values by more than 10%.
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- 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.
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in: Joseph Herriges & Catherine L. Kling (ed.), Revealed Preference Approaches to Environmental Valuation, volume 0, pages 53-64
W.E. Upjohn Institute for Employment Research.
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