Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings
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)
University of Chicago - Department of Economics; Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)
Haas School of Business; National Bureau of Economic Research (NBER)
December 21, 2012
MIT Department of Economics Working Paper No. 12-30
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, Q53working papers series
Date posted: December 22, 2012 ; Last revised: December 27, 2012
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