Hedonic analysis of willingness to pay for dam removal: evidence from Plymouth, Massachusetts

This study investigates how the removal of small dams, and subsequent river restoration investments, affect residential housing prices in Plymouth, Massachusetts, selected for its unusually high density of dam removals. From 2002 to 2019, 5 dams within 1.05 miles of each other have been removed. Following removal, riverine restoration was completed, leading to improved public safety for downstream infrastructure, fish passage, and better water quality. Yet, contention exists in local government decision-making from fear of loss of property values of homes that are no longer classified as “waterfront.” To examine that charge, we evaluate sale prices of 9,710 single-family homes from 1997 to 2021, in a comparative estimation of a hedonic regression and a difference in differences model. The results indicate that the price of homes sold in Plymouth after dam removal increased, with no impact on property values of waterfront and properties within 1 mile of riverine restoration locations. For properties within a 5-mile radius of a former dam, we observe comparative difference in price of a fraction of a percent for lots around 2 of the dams, in relation to all home lots in Plymouth. We explain that this difference is due to property-specific features, rather than the impact of dam removal. The implications are that dam removal would not negatively impact waterfront property values, while it may translate into an overall environmental price premium for the community at large.