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Clear skies, dark waters: The Gulf oil spill and the price of coastal condominiums in Alabama

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  • Christy Siegel
  • Steven B. Caudill
  • Franklin G. Mixon

Abstract

This study focuses on the effect on real estate prices of the oil spill in the Gulf of Mexico in 2010.  Based on previous studies on the effects of water contamination on real estate, it is likely that this oil spill, which was not capped for three months, had a drastic effect on real estate prices. Using data on condominium prices in Orange Beach and Gulf Shores, Alabama, from January 2009 to September 2011, econometric tests suggest that there was a $25 per square foot decrease in condominium sale prices after the oil spill, representing a decline in value of 12.1 percent.

Suggested Citation

  • Christy Siegel & Steven B. Caudill & Franklin G. Mixon, 2013. "Clear skies, dark waters: The Gulf oil spill and the price of coastal condominiums in Alabama," Economics and Business Letters, Oviedo University Press, vol. 2(2), pages 42-53.
    • Handle: RePEc:ove:journl:aid:9893
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/9893
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    Cited by:

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    2. Burton, Kati & Maas, Alexander & Lee, Katherine, 2022. "A Case Study in Contamination: Persistent Home Value Losses Associated with the Elk River Spill," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(3), September.
    3. Steven B Caudill & Ermanno Affuso & Ming Yang, 2015. "Registered sex offenders and house prices: An hedonic analysis," Urban Studies, Urban Studies Journal Limited, vol. 52(13), pages 2425-2440, October.
    4. Charles F. Mason, 2017. "Public Policy Towards Offshore Oil Spills," CESifo Working Paper Series 6584, CESifo.
    5. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    6. Cano-Urbina, Javier & Clapp, Christopher M. & Willardsen, Kevin, 2019. "The effects of the BP Deepwater Horizon oil spill on housing markets," Journal of Housing Economics, Elsevier, vol. 43(C), pages 131-156.
    7. Hellman, Kelly L. & Walsh, Patrick J., 2017. "Property Values and the Risk from an Oil Spill: the Effects of the Deepwater Horizon Oil Spill in Hillsborough County," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259117, Agricultural and Applied Economics Association.
    8. Robert Forster & Destan Kirimhan & Xiaojin Sun, 2022. "Deepwater Horizon and Mortgage Lending," Working Papers 202219, University of Liverpool, Department of Economics.

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