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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, 2019. "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, revised 2019.
    • Handle: RePEc:zbw:rwirep:791
    DOI: 10.4419/86788919
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    Cited by:

    1. Breidenbach Philipp & Schaffner Sandra, 2020. "Real estate data for Germany (RWI-GEO-RED)," German Economic Review, De Gruyter, vol. 21(3), pages 401-416, September.
    2. Oliver Ruhnau & Anselm Eicke & Raffaele Sgarlato & Tim Tröndle & Lion Hirth, 2024. "Cost-Potential Curves of Onshore Wind Energy: the Role of Disamenity Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(2), pages 347-368, February.
    3. Hans Westlund & Mats Wilhelmsson, 2021. "The Socio-Economic Cost of Wind Turbines: A Swedish Case Study," Sustainability, MDPI, vol. 13(12), pages 1-16, June.
    4. Frondel, Manuel, 2024. "Ökologischer Umbau von Wirtschaft und Gesellschaft: Kosten und Nutzen," RWI Materialien 163, RWI - Leibniz-Institut für Wirtschaftsforschung.
    5. Lehmann, Paul & Reutter, Felix & Tafarte, Philip, 2021. "Optimal siting of onshore wind turbines: Local disamenities matter," UFZ Discussion Papers 4/2021, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    6. Wehrle, Sebastian & Gruber, Katharina & Schmidt, Johannes, 2021. "The cost of undisturbed landscapes," Energy Policy, Elsevier, vol. 159(C).
    7. Eren Aydin & Kathleen Kürschner Rauck, 2023. "Low-emission zones, modes of transport and house prices: evidence from Berlin’s commuter belt," Transportation, Springer, vol. 50(5), pages 1847-1895, October.
    8. 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).
    9. Jan von Detten & Johann V. Seebaß & Jan C. Schlüter & Florian Hackelberg, 2023. "Influence of onshore wind turbines on land values [Einfluss von Onshore-Windenergieanlagen auf den Grundstückswert]," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 9(1), pages 63-80, April.
    10. 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.

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    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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