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Stigmatized asset value: is it temporary or permanent?

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  • McCluskey, Jill
  • Rausser, Gordon C.

Abstract

Stigma is a negative attribute of real estate acquired by the discovery of contamination and reflected in its value (Elliot-Jones, 1996). Using a theoretical model with external economies and adjustment costs, we show that both temporary stigma and permanent stigma are possible equilibrium outcomes after the discovery and cleanup of a hazardous waste site. The existence and duration of stigma are examined using hedonic price techniques with data from housing sales prices in Dallas County, Texas. The empirical evidence shows that stigma exists after cleanup only for properties in very close proximity to the hazardous waste site.

Suggested Citation

  • McCluskey, Jill & Rausser, Gordon C., 1999. "Stigmatized asset value: is it temporary or permanent?," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt59b1t566, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt59b1t566
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    References listed on IDEAS

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    Cited by:

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    2. Robin R. Jenkins & Elizabeth Kopits & David Simpson, 2006. "Measuring the Social Benefits of EPA Land Cleanup and Reuse Programs," NCEE Working Paper Series 200603, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2006.
    3. Stefania Tonin & Margherita Turvani, 2011. "Environmental contamination and industrial real estate market: an application of hedonic price method in Italy," ERSA conference papers ersa10p511, European Regional Science Association.
    4. Stefania Tonin & Margherita Turvani, 2014. "Redeveloping industrial land: are contamination and remediation schemes affecting the price of industrial real estate properties?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(7), pages 1043-1065, July.

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