IDEAS home Printed from https://ideas.repec.org/p/hhs/uunewp/2009_010.html
   My bibliography  Save this paper

The Effects of a Refinery on Property Values – The Case of Sweden

Author

Listed:
  • Winstrand, Jakob

    () (Department of Economics)

Abstract

This study estimates the impact of the non-aesthetic view and odor caused by Preemraff, a refinery on the Swedish west coast, on house values in the surrounding area. To carry out the analysis a spatial hedonic house price model was applied to transaction data for the period 1994 - 1996, enriched with information whether Preemraff was visible or not from the property. The results indicate that house prices increase as distance to Preemraff increases, but that the effect is small. The estimated price elasticity with respect to distance in the direction the prevailing wind blows is 0.071 and 0.162 in the opposite direction. This suggests that there is an effect of the odor on house prices, though the magnitude of the effect is small. Further estimates indicate that the negative effect of a view of Preemraff from a house is relatively strong in the proximity of the refinery, -24.6 % at a distance of 1000 meters. However, at larger distances the visibility of Preemraff declines and already 2000 meters from Preemraff the positive effect ofhaving a view overshadows the negative effect of the visible refinery. The estimates also imply that the premium for a sea front in a parish non-adjacent to Preemraff is about 139.6 % whereas in an adjacent parish the premium is 47.7 %. The corresponding premiums for a sea view are 69.0 % and 23.7 %.

Suggested Citation

  • Winstrand, Jakob, 2009. "The Effects of a Refinery on Property Values – The Case of Sweden," Working Paper Series 2009:10, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:2009_010
    as

    Download full text from publisher

    File URL: http://uu.diva-portal.org/smash/get/diva2:225795/FULLTEXT01.pdf
    Download Restriction: no

    More about this item

    Keywords

    Refinery; hedonic house price model; spatial correlation; heterogeneous directional effects;

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:uunewp:2009_010. 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: (Katarina Grönvall). General contact details of provider: http://edirc.repec.org/data/nekuuse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.