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Local cost for global benefit: The case of wind turbines

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  • Frondel, Manuel
  • Kussel, Gerhard
  • Sommer, Stephan
  • Vance, Colin

Abstract

Given the rapid expansion of wind power capacities in Germany, this paper estimates the effects of wind turbines on house prices using real estate price data from Germany's leading online broker. Employing a hedonic price model whose specification is informed by machine learning techniques, our methodological approach provides insights into the sources of heterogeneity in treatment effects. We estimate an average treatment effect (ATE) of up to -7.1% for houses within a one-kilometer radius of a wind turbine, an effect that fades to zero at a distance of 8 to 9 km. Old houses and those in rural areas are affected the most, while home prices in urban areas are hardly affected. These results highlight that substantial local externalities are associated with wind power plants.

Suggested Citation

  • Frondel, Manuel & Kussel, Gerhard & Sommer, Stephan & Vance, Colin, 2018. "Local cost for global benefit: The case of wind turbines," Ruhr Economic Papers 791, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:791
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    References listed on IDEAS

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    1. Gibbons, Stephen, 2015. "Gone with the wind: Valuing the visual impacts of wind turbines through house prices," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 177-196.
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    Cited by:

    1. Frondel, Manuel & Thomas, Tobias, 2020. "Dekarbonisierung bis zum Jahr 2050? Klimapolitische Maßnahmen und Energieprognosen für Deutschland, Österreich und die Schweiz," DICE Ordnungspolitische Perspektiven 105, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Frondel, Manuel & Thomas, Tobias, 2020. "Dekarbonisierung bis zum Jahr 2050? Klimapolitische Maßnahmen und Energieprognosen für Deutschland, Österreich und die Schweiz," Research Papers 13, EcoAustria – Institute for Economic Research.
    3. Gonçalves, S. & Rodrigues, T.P. & Chagas, A.L.S., 2020. "The impact of wind power on the Brazilian labor market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 128(C).

    More about this item

    Keywords

    wind power; hedonic price model;

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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