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Contaminated Groundwater: Uncovering the Effects on Home Values

Author

Listed:
  • Jack Keane
  • Dennis Guignet

Abstract

About 15% of the United States population (43 million people) rely on private wells for their primary source of potable water, and yet (in contrast to public water systems), no routine contaminant monitoring and water treatment is required. Water testing can be expensive, and the need for routine testing may often be unknown to residents, thus allowing potentially harmful water contaminants to go undetected. As such, estimates of the potential effects on households are needed to inform policies and programs to maintain safe potable groundwater wells. We attempt to help fill this gap by estimating hedonic property value models of homes in the Orlando, Florida Metropolitan Statistical Area. We link home transactions to home-specific private well tests conducted by the Florida Department of Health. We find that homes with groundwater well contamination experience a roughly 7% decline in value, and that this decrement persists for many years. Key Words: contamination; drinking water; groundwater; hedonic; housing; private well

Suggested Citation

  • Jack Keane & Dennis Guignet, 2025. "Contaminated Groundwater: Uncovering the Effects on Home Values," Working Papers 25-05, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:25-05
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp2505.pdf
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    More about this item

    Keywords

    contamination; drinking water; groundwater; hedonic; housing; private well;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • 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
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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