What Do Property Values Really Tell Us? A Hedonic Study of Underground Storage Tanks
Hedonic property value models are widely used but are susceptible to potentially invalid conjectures based on the assumed measure of environmental quality. This paper focuses on an application where this is of particular concern: leaking underground storage tanks. I estimate a hedonic model using quasi-experimental and spatial econometric techniques. Similar to previous studies, I examine how house prices vary with distance to the disamenity. This approach yields little evidence that prices are adversely impacted. However, to better measure risks I utilize home-specific data on groundwater well tests and correspondence from regulators, and find an 11% depreciation when households are well informed.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lucas W. Davis, 2004. "The Effect of Health Risk on Housing Values: Evidence from a Cancer Cluster," American Economic Review, American Economic Association, vol. 94(5), pages 1693-1704, December.
- 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.
- Kent Messer & William Schulze & Katherine Hackett & Trudy Cameron & Gary McClelland, 2006. "Can Stigma Explain Large Property Value Losses? The Psychology and Economics of Superfund," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 33(3), pages 299-324, 03.
- Jungik Kim & Peter Goldsmith, 2009. "A Spatial Hedonic Approach to Assess the Impact of Swine Production on Residential Property Values," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(4), pages 509-534, April.
- Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, vol. 24(1), pages 1-14, January.
- Trudy Ann Cameron, 2003.
"Directional Heterogeneity in Distance Profiles in Hedonic Property Value Models,"
University of Oregon Economics Department Working Papers
2003-17, University of Oregon Economics Department, revised 01 Jul 2003.
- Cameron, Trudy Ann, 2006. "Directional heterogeneity in distance profiles in hedonic property value models," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 26-45, January.
- Robert A. Simons & William Bowen & Arthur Sementell, 1997. "The Effect of Underground Storage Tanks on Residential Property Values in Cuyahoga County, Ohio," Journal of Real Estate Research, American Real Estate Society, vol. 14(1), pages 29-42.
- Kohlhase, Janet E., 1991. "The impact of toxic waste sites on housing values," Journal of Urban Economics, Elsevier, vol. 30(1), pages 1-26, July.
- Sudip Chattopadhyay & John B. Braden & Arianto Patunru, 2005. "Benefits Of Hazardous Waste Cleanup: New Evidence From Survey- And Market-Based Property Value Approaches," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 357-375, 07.
- Kiel, Katherine & Zabel, Jeffrey, 2001. "Estimating the Economic Benefits of Cleaning Up Superfund Sites: The Case of Woburn, Massachusetts," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 163-84, March-May.
- Eric J. Horsch & David J. Lewis, 2009. "The Effects of Aquatic Invasive Species on Property Values: Evidence from a Quasi-Experiment," Land Economics, University of Wisconsin Press, vol. 85(3), pages 391-409.
- Holly J. Michael & Kevin J. Boyle & Roy Bouchard, 2000. "Does the Measurement of Environmental Quality Affect Implicit Prices Estimated from Hedonic Models?," Land Economics, University of Wisconsin Press, vol. 76(2), pages 283-298.
- Sudip Chattopadhyay, 1999. "Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market," Land Economics, University of Wisconsin Press, vol. 75(1), pages 22-38.
- Larry Dale & James C. Murdoch & Mark A. Thayer & Paul A. Waddell, 1999. "Do Property Values Rebound from Environmental Stigmas? Evidence from Dallas," Land Economics, University of Wisconsin Press, vol. 75(2), pages 311-326.
- Pope, Jaren C., 2008. "Buyer information and the hedonic: The impact of a seller disclosure on the implicit price for airport noise," Journal of Urban Economics, Elsevier, vol. 63(2), pages 498-516, March.
- Jill J. McCluskey & Gordon C. Rausser, 2003. "Stigmatized Asset Value: Is It Temporary or Long-Term?," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 276-285, May.
- Kiel, Katherine A. & Williams, Michael, 2007. "The impact of Superfund sites on local property values: Are all sites the same?," Journal of Urban Economics, Elsevier, vol. 61(1), pages 170-192, January.
- Michaels, R. Gregory & Smith, V. Kerry, 1990. "Market segmentation and valuing amenities with hedonic models: The case of hazardous waste sites," Journal of Urban Economics, Elsevier, vol. 28(2), pages 223-242, September.
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:89:y:2013:ii:1:p:211-226. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.