The effect of wind power on residential property values in Norway

This paper analyses, for the first time in Norway, the effects of onshore wind farms on residential property prices by using a hedonic price model in combination with difference-in-differences analysis and spatial fixed effects to estimate homeowners' preferences for (avoiding) living near a wind farm. The analysis utilizes data on all 60 concessioned wind farms in Norway and over 160,000 observations of property transactions in the period 2010–22. We find that residential property prices decline in proximity to operating wind farms. The magnitude and spatial extent of the estimated price effects are uncertain and vary across model specifications, from −4 to −14 % for properties within 2 km. The effect diminishes with distance and converges to zero at 3–7 km. An event study analysis indicates that property prices are primarily affected after wind farms become operational, with some impact during the construction phase. We find no evidence of price adjustments over time consistent with adaptation or diminishing sensitivity. Heterogeneity analyses indicate that price reductions may be larger near wind farms with more turbines. Within 2 km, a substantial share of the effect appears to be driven by turbine visibility: using a digital elevation model combined with data on forest and vegetation cover, we isolate visibility from proximity through a difference-in-differences-in-differences design. The paper contributes to a surging literature on hedonic analysis of renewable energy infrastructure and the ongoing discussions on trade-offs between climate benefits and local disamenity costs.