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

Shanti Gamper-Rabindran

University of Pittsburgh - Graduate School of Public and International Affairs

Christopher Timmins

Duke University - Department of Economics

Date Written: February 1, 2012

Abstract

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

Gamper-Rabindran, Shanti and Timmins, Christopher, Does Cleanup of Hazardous Waste Sites Raise Housing Values? Evidence of Spatially Localized Benefits (February 1, 2012). Duke Environmental Economics Working Paper No. 12-03. Available at SSRN: https://ssrn.com/abstract=2006632 or http://dx.doi.org/10.2139/ssrn.2006632

Shanti Gamper-Rabindran (Contact Author)

University of Pittsburgh - Graduate School of Public and International Affairs ( email )

Pittsburgh, PA 15260-0001
United States
(412) 648-8266 (Phone)
(412) 648-2605 (Fax)

HOME PAGE: http://www.pitt.edu/~shanti1/

Christopher D. Timmins

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1809 (Phone)
919-684-8974 (Fax)

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