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Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings


Janet Currie


National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA); Princeton University

Lucas W. Davis


University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Michael Greenstone


University of Chicago - Department of Economics; Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Reed Walker


Haas School of Business; National Bureau of Economic Research (NBER)

December 21, 2012

MIT Department of Economics Working Paper No. 12-30

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.

Number of Pages in PDF File: 45

Keywords: toxic pollutants, hedonic analysis, environmental health risks, local externalities

JEL Classification: D62, I18, Q51, Q53

working papers series





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Date posted: December 22, 2012 ; Last revised: December 27, 2012

Suggested Citation

Currie, Janet and Davis, Lucas W. and Greenstone, Michael and Walker, Reed, Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings (December 21, 2012). MIT Department of Economics Working Paper No. 12-30. Available at SSRN: http://ssrn.com/abstract=2192658 or http://dx.doi.org/10.2139/ssrn.2192658

Contact Information

Janet Currie
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Princeton University ( email )
Princeton, NJ 08544-1021
United States
6092587393 (Phone)
HOME PAGE: http://www.princeton.edu/~jcurrie

Lucas W. Davis
University of California, Berkeley - Haas School of Business ( email )
545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Michael Greenstone (Contact Author)
University of Chicago - Department of Economics ( email )
1126 East 59th Street
Chicago, IL 60637
United States
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Reed Walker
Haas School of Business ( email )
545 Student Services Building
Berkeley, CA 94720
United States
HOME PAGE: http://faculty.haas.berkeley.edu/rwalker/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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References:  64
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