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The Impact of Oil and Natural Gas Facilities on Rural Residential Property

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This paper examines the impact of oil and gas facilities on rural residential property values using data from central Alberta, Canada. The influences are evaluated using two groups of variables characterizing hazard effects and amenity effects. A spatial error model was employed to capture the spatial dependence between neighbouring properties. The results show that property values are negatively correlated with the number of sour gas wells and flaring oil batteries within 4km of the property. Indices reflecting potential health hazards associated with rates of H2 S release (based on information from Emergency Response Plans and Zones) also have a significant negative association with property prices. The findings suggest that oil and sour gas facilities located within 4 km of rural residential properties significantly affect their sale price.

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  • Peter C. Boxall, Wing H. Chan, and Melville L. McMillan, 2005. "The Impact of Oil and Natural Gas Facilities on Rural Residential Property," Working Papers eg0039, Wilfrid Laurier University, Department of Economics, revised 2005.
    • Handle: RePEc:wlu:wpaper:eg0039
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    More about this item

    Keywords

    sour gas; hedonic prices; property value impacts;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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