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Residential Location Impacts of Environmental Disamenity: The Case of Gravel Pit Operation and Landfills

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  • Zhang, Zhaohua
  • Hite, Diane

Abstract

In this paper, we analyze how environmental disamenity affects residential location choices using a horizontal sorting model. The environmental disamenity is measured by the distances between houses and the nearest landfill and gravel pit. The study area in this paper is the Franklin County of Ohio State and each of the housing units chosen by the households in the sample represents a housing type. The first stage estimation results show that rich white householder are more likely to select houses with longer distance from the gravel pits and landfills than rich black householder. After controlling for the price endogeneity, the second stage estimation supports the hypothesis that longer distance to the landfill increases the fixed utility of the house. Also, the direction for the effect of distance to the nearest gravel pit is as expected, which indicates that households prefer to select houses with longer distance to the gravel pit operation.

Suggested Citation

  • Zhang, Zhaohua & Hite, Diane, 2016. "Residential Location Impacts of Environmental Disamenity: The Case of Gravel Pit Operation and Landfills," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229739, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea16:229739
    DOI: 10.22004/ag.econ.229739
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    References listed on IDEAS

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    1. Hite, Diane & Chern, Wen & Hitzhusen, Fred & Randall, Alan, 2001. "Property-Value Impacts of an Environmental Disamenity: The Case of Landfills," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 185-202, March-May.
    2. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    3. Bouvier, Rachel A. & Halstead, John M. & Conway, Karen S. & Manalo, Alberto B., 2000. "The Effects of Landfills on Rural Residential Property Values: Some Empirical Evidence," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 30(2), pages 1-15.
    4. Allen Klaiber, H. & Phaneuf, Daniel J., 2010. "Valuing open space in a residential sorting model of the Twin Cities," Journal of Environmental Economics and Management, Elsevier, vol. 60(2), pages 57-77, September.
    5. Bayer, Patrick & Keohane, Nathaniel & Timmins, Christopher, 2009. "Migration and hedonic valuation: The case of air quality," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 1-14, July.
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    7. Tra, Constant I., 2010. "A discrete choice equilibrium approach to valuing large environmental changes," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 183-196, February.
    8. Richard C. Ready, 2010. "Do Landfills Always Depress Nearby Property Values?," Journal of Real Estate Research, American Real Estate Society, vol. 32(3), pages 321-340.
    9. H. Spencer Banzhaf & Randall P. Walsh, 2008. "Do People Vote with Their Feet? An Empirical Test of Tiebout," American Economic Review, American Economic Association, vol. 98(3), pages 843-863, June.
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    Keywords

    Consumer/Household Economics; Land Economics/Use;

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