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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.

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  • 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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    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. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," Papers 2303.17180, arXiv.org.
    5. Modica, Marco, 2017. "Does the construction of biogas plants affect local property values?," Economics Letters, Elsevier, vol. 159(C), pages 169-172.
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    8. Kawaguchi, Daiji & Yukutake, Norifumi, 2017. "Estimating the residential land damage of the Fukushima nuclear accident," Journal of Urban Economics, Elsevier, vol. 99(C), pages 148-160.
    9. 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.
    10. Hill, Elaine L., 2018. "Shale gas development and infant health: Evidence from Pennsylvania," Journal of Health Economics, Elsevier, vol. 61(C), pages 134-150.
    11. 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.
    12. Emmanuelle Lavaine & Matthew Neidell, 2017. "Energy Production and Health Externalities: Evidence from Oil Refinery Strikes in France," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 447-477.
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    15. Ishimura, Yuichi & Takeuchi, Kenji, 2019. "The spatial concentration of waste landfill sites in Japan," Resource and Energy Economics, Elsevier, vol. 58(C).
    16. von der Goltz, Jan & Barnwal, Prabhat, 2019. "Mines: The local wealth and health effects of mineral mining in developing countries," Journal of Development Economics, Elsevier, vol. 139(C), pages 1-16.
    17. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 815-836.
    18. KAWAGUCHI, Daiji & 川口, 大司 & YUKUTAKE, Norifumi & 行武, 憲史, 2014. "Estimating the Residential Land Damage of the Fukushima Accident," Discussion Papers 2014-18, Graduate School of Economics, Hitotsubashi University.
    19. 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.
    20. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 189-210.
    21. Olexiy Kyrychenko, 2021. "The Impact of the Crisis-inducted Reduction in Air Pollution on Infant Mortality in India: A Policy Perspective," CERGE-EI Working Papers wp702, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    22. James K. Boyce & Klara Zwickl & Michael Ash, 2014. "Three Measures of Environmental Inequality," Working Papers Series 12, Institute for New Economic Thinking.
    23. Walsh, Patrick & Mui, Preston, 2017. "Contaminated sites and information in hedonic models: An analysis of a NJ property disclosure law," Resource and Energy Economics, Elsevier, vol. 50(C), pages 1-14.

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    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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