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The Impact of Hazardous Industrial Facilities on Housing Prices : A Comparison of Parametric and Semiparametric Hedonic Price Models

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  • Céline Grislain-Letrémy

    () (INSEE, CREST, Université Paris-Dauphine)

  • Arthur Katossky

    ()

Abstract

The willingness of households to pay for prevention against industrial risks can be revealed by real estate markets. By using very rich microdata, we study housing prices in the vicinity of hazardous industries near three important French cities. We show that the impact of hazardous plants on the housing values strongly differs among these three areas, even if the areas all surround chemical and petrochemical industries. We compare the results from both standard parametric and more flexible, semiparametric models of hedonic property. We show that the parametric model might structurally lead to important biases in the estimated value of the impact of hazardous plants on housing values and in the variations of this impact with respect to the distance from the plants

Suggested Citation

  • Céline Grislain-Letrémy & Arthur Katossky, 2014. "The Impact of Hazardous Industrial Facilities on Housing Prices : A Comparison of Parametric and Semiparametric Hedonic Price Models," Working Papers 2014-13, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2014-13
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    Cited by:

    1. Grislain-Letrémy, Céline & Villeneuve, Bertrand, 2020. "The ground for negotiation: Zoning for risk reduction around hazardous plants," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 657-677.
    2. Ostermeijer, Francis & Koster, Hans RA. & van Ommeren, Jos, 2019. "Residential parking costs and car ownership: Implications for parking policy and automated vehicles," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 276-288.
    3. Richard H. Rijnks & Stephen Sheppard, 2018. "Occupant Well-Being and House Values," Department of Economics Working Papers 2018-05, Department of Economics, Williams College.
    4. Fan Liu & Min Min & Ke Zhao & Weiyan Hu, 2020. "Spatial-Temporal Variation in the Impacts of Urban Infrastructure on Housing Prices in Wuhan, China," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-18, February.
    5. Modica, Marco, 2017. "Does the construction of biogas plants affect local property values?," Economics Letters, Elsevier, vol. 159(C), pages 169-172.
    6. Touseef Hussain & Jaffar Abbas & Zou Wei & Mohammad Nurunnabi, 2019. "The Effect of Sustainable Urban Planning and Slum Disamenity on The Value of Neighboring Residential Property: Application of The Hedonic Pricing Model in Rent Price Appraisal," Sustainability, MDPI, Open Access Journal, vol. 11(4), pages 1-20, February.
    7. Loïc Lévi & Jean Jacques Nowak & Sylvain Petit & Hakim Hammadou, 2020. "Industrial legacy and hotel pricing: An application of spatial hedonic pricing analysis in Nord-Pas-de-Calais, France," Post-Print hal-03065276, HAL.
    8. Rita Yi Man Li & Herru Ching Yu Li, 2018. "Have Housing Prices Gone with the Smelly Wind? Big Data Analysis on Landfill in Hong Kong," Sustainability, MDPI, Open Access Journal, vol. 10(2), pages 1-19, January.

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    More about this item

    Keywords

    hedonic analysis; locally weighted regression; urban housing markets; industrial risk;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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