Does Cleanup of Hazardous Waste Sites Raise Housing Values? Evidence of Spatially Localized Benefits
Duke Environmental Economics Working Paper No. 12-03
57 Pages Posted: 18 Feb 2012 Last revised: 21 Feb 2012
Date Written: February 1, 2012
Economists often rely on publicly available data provided at coarse geographical resolution to value spatially localized amenities. We propose a simple refinement to the hedonic method that accommodates this reality: specifically, we measure localized benefits from the cleanup of hazardous waste sites at the sub-census tract level by examining the entire within-tract housing value distribution, rather than simply focusing on the tract median. Doing so, we find significantly larger benefits from NPL listing at lower percentiles. We find large effects of construction complete and deletion across the housing value distribution, although these effects are also larger at lower percentiles. We confirm these results with restricted access census block data, and use proprietary housing transactions data to show that cheaper houses within a census tract are indeed more likely to be closer to a hazardous waste site, explaining the greater impacts they receive from the cleanup process.
Keywords: Hedonic property method, localized public goods, heterogeneous treatment effects, hazardous waste remediation
JEL Classification: H41, C2, Q5
Suggested Citation: Suggested Citation