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Modeling the Property Price Impact of Water Quality in 14 Chesapeake Bay Counties

Author

Listed:
  • Patrick J. Walsh
  • Charles Griffiths
  • Dennis Guignet
  • Heather Klemick

Abstract

The Chesapeake Bay and its tributaries provide a range of recreational and aesthetic amenities, such as swimming, fishing, boating, wildlife viewing, and scenic vistas. Living in close proximity to the Bay improves access to these amenities and should be capitalized into local housing markets. We investigate these impacts in the largest hedonic analysis of water quality ever completed, with over 200,000 property sales across 14 Maryland counties. We use a spatially explicit water quality dataset, along with a wealth of landscape, economic, geographic, and demographic variables. These data allow a comprehensive exploration of the value of water quality, while controlling for a multitude of other influences. We also estimate several variants of the models most popular in current literature, with a focus on the temporal average of water quality. In comparing 1 year and 3 year averages, the 3 year averages generally have a larger implicit price. Overall, results indicate that water quality improvements in the Bay, such as those required by EPA’s Total Maximum Daily Load, could yield significant benefits to waterfront and near-waterfront homeowners.

Suggested Citation

  • Patrick J. Walsh & Charles Griffiths & Dennis Guignet & Heather Klemick, 2015. "Modeling the Property Price Impact of Water Quality in 14 Chesapeake Bay Counties," NCEE Working Paper Series 201507, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Dec 2015.
  • Handle: RePEc:nev:wpaper:wp201507
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    References listed on IDEAS

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    Cited by:

    1. repec:kap:enreec:v:69:y:2018:i:2:d:10.1007_s10640-016-0078-3 is not listed on IDEAS
    2. Heather Klemick & Charles Griffiths & Dennis Guignet & Patrick Walsh, 2015. "Explaining Variation in the Value of Chesapeake Bay Water Quality Using Internal Meta-analysis," NCEE Working Paper Series 201504, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2015.

    More about this item

    Keywords

    water quality; hedonic property value analysis; Chesapeake Bay; valuation;

    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
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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