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Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings

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  • Janet Currie
  • Lucas Davis
  • Michael Greenstone
  • Reed Walker

Abstract

A ubiquitous and largely unquestioned assumption in studies of housing markets is that there is perfect information about local amenities. This paper measures the housing market and health impacts of 1,600 openings and closings of industrial plants that emit toxic pollutants. We find that housing values within one mile decrease by 1.5 percent when plants open, and increase by 1.5 percent when plants close. This implies an aggregate loss in housing values per plant of about $1.5 million. While the housing value impacts are concentrated within 1/2 mile, we find statistically significant infant health impacts up to one mile away.

Suggested Citation

  • Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2013. "Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings," NBER Working Papers 18700, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18700
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    References listed on IDEAS

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    Cited by:

    1. Janet Currie & Hannes Schwandt, 2016. "The 9/11 Dust Cloud and Pregnancy Outcomes: A Reconsideration," Journal of Human Resources, University of Wisconsin Press, vol. 51(4), pages 805-805-831.
    2. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 689-730, September.
    3. Ziebarth, N. R. & Schmitt, M. & Karlsson, M., 2013. "The short-term population health effects of weather and pollution: implications of climate change," Health, Econometrics and Data Group (HEDG) Working Papers 13/34, HEDG, c/o Department of Economics, University of York.
    4. Tom Chang & Joshua Graff Zivin & Tal Gross & Matthew Neidell, 2016. "Particulate Pollution and the Productivity of Pear Packers," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 141-169, August.
    5. Zhu, Hongjia & Deng, Yongheng & Zhu, Rong & He, Xiaobo, 2016. "Fear of nuclear power? Evidence from Fukushima nuclear accident and land markets in China," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 139-154.
    6. Grislain-Letrémy, Céline & Katossky, Arthur, 2014. "The impact of hazardous industrial facilities on housing prices: A comparison of parametric and semiparametric hedonic price models," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 93-107.
    7. repec:eee:juecon:v:99:y:2017:i:c:p:148-160 is not listed on IDEAS
    8. repec:ucp:jpolec:doi:10.1086/691465 is not listed on IDEAS
    9. Emmanuelle Lavaine & Matthew J. Neidell, 2013. "Energy Production and Health Externalities: Evidence from Oil Refinery Strikes in France," NBER Working Papers 18974, National Bureau of Economic Research, Inc.
    10. Adam Isen & Maya Rossin-Slater & W. Reed Walker, 2017. "Every Breath You Take—Every Dollar You’ll Make: The Long-Term Consequences of the Clean Air Act of 1970," Journal of Political Economy, University of Chicago Press, vol. 125(3), pages 848-902.
    11. Hill, Elaine L., 2012. "Shale Gas Development and Infant Health: Evidence from Pennsylvania," Working Papers 180063, Cornell University, Department of Applied Economics and Management.
    12. KAWAGUCHI, Daiji & YUKUTAKE, Norifumi, 2014. "Estimating the Residential Land Damage of the Fukushima Accident," Discussion Papers 2014-18, Graduate School of Economics, Hitotsubashi University.
    13. Rohlf, Alexander & Römer, Daniel & von Graevenitz, Kathrine, 2014. "The Effect of Emission Information on Housing Prices in Germany," Working Papers 0554, University of Heidelberg, Department of Economics.
    14. repec:eee:resene:v:50:y:2017:i:c:p:1-14 is not listed on IDEAS

    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • 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

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