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Toxic Assets: How the Housing Market Responds to Environmental Information Shocks

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  • Jeremy G. Moulton
  • Nicholas J. Sanders
  • Scott A. Wentland

Abstract

Using national microdata from Zillow, we examine how U.S. housing markets respond to expanded information on local pollution stemming from a 1998 reporting change to the Toxics Release Inventory (TRI). Using both a difference-in-differences and a regression discontinuity in time design, we find that news coverage of the new TRI data lowered sales prices of homes near the largest reporting polluters but only within a tight geographic distance. Effects are isolated to homes within 0.5 miles of facilities reporting the largest amount of emissions (> 100 tons). This price capitalization implies public information on local polluters shifted private market behavior, suggesting a role for government as provider of information.

Suggested Citation

  • Jeremy G. Moulton & Nicholas J. Sanders & Scott A. Wentland, 2024. "Toxic Assets: How the Housing Market Responds to Environmental Information Shocks," Land Economics, University of Wisconsin Press, vol. 100(1), pages 66-88.
    • Handle: RePEc:uwp:landec:v:100:y:2024:i:1:p:66-88
    Note: DOI: https://doi.org/10.3368/le.100.1.102122-0089R
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    Cited by:

    1. Jeremy G. Weber & J. Wesley Burnett & Irene M. Xiarchos, 2016. "Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(3), pages 587-614, June.
    2. Billings, Stephen B. & Schnepel, Kevin T., 2017. "The value of a healthy home: Lead paint remediation and housing values," Journal of Public Economics, Elsevier, vol. 153(C), pages 69-81.
    3. Modica, Marco, 2017. "Does the construction of biogas plants affect local property values?," Economics Letters, Elsevier, vol. 159(C), pages 169-172.
    4. Fink, Alexander & Stratmann, Thomas, 2015. "U.S. housing prices and the Fukushima nuclear accident," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 309-326.
    5. Gibbons, Stephen & Heblich, Stephan & Timmins, Christopher, 2021. "Market tremors: Shale gas exploration, earthquakes, and their impact on house prices," Journal of Urban Economics, Elsevier, vol. 122(C).
    6. Zhaohua Zhang & Derrick Robinson & Diane Hite, 2018. "Racial Residential Segregation: Measuring Location Choice Attributes of Environmental Quality and Self-Segregation," Sustainability, MDPI, vol. 10(4), pages 1-20, April.
    7. Alexander Fink & Thomas Stratmann, 2013. "U.S. housing prices and the Fukushima nuclear accident: To update, or not to update, that is the question," ICER Working Papers 04-2013, ICER - International Centre for Economic Research.
    8. Du, Xinming, 2023. "Competing with clean air: Pollution disclosure and college desirability," Ecological Economics, Elsevier, vol. 204(PA).
    9. Tu, Meng & Zhang, Bing & Xu, Jianhua & Lu, Fangwen, 2020. "Mass media, information and demand for environmental quality: Evidence from the “Under the Dome”," Journal of Development Economics, Elsevier, vol. 143(C).

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    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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