The Effect of Power Plants on Local Housing Values and Rents: Evidence from Restricted Census Microdata

33 Pages Posted: 29 Jul 2009

See all articles by Lucas W. Davis

Lucas W. Davis

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

Date Written: July 1, 2008

Abstract

Current trends in electricity consumption imply that hundreds of new fossil-fuel power plants will be built in the United States over the next several decades. Power plant siting has become increasingly contentious, in part because power plants are a source of numerous negative local externalities including elevated levels of air pollution, haze, noise and traffic. Policymakers attempt to take these local disamenities into account when siting facilities, but little reliable evidence is available about their quantitative importance. This paper examines neighborhoods in the United States where power plants were opened during the 1990s using household-level data from a restricted version of the U.S. decennial census. Compared to neighborhoods farther away, housing values and rents decreased by 3-5% between 1990 and 2000 in neighborhoods near sites. Estimates of household marginal willingness-to-pay to avoid power plants are reported separately for natural gas and other types of plants, large plants and small plants, base load plants and peaker plants, and upwind and downwind households.

Keywords: Power Plants, Siting, Local Air Quality, Housing Markets

JEL Classification: D62, D63, H23, Q51

Suggested Citation

Davis, Lucas W., The Effect of Power Plants on Local Housing Values and Rents: Evidence from Restricted Census Microdata (July 1, 2008). US Census Bureau Center for Economic Studies Paper No. CES-WP- 08-19, Available at SSRN: https://ssrn.com/abstract=1440906 or http://dx.doi.org/10.2139/ssrn.1440906

Lucas W. Davis (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

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2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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