Hazardous Waste Sites and Housing Appreciation Rates

Posted: 4 Apr 2000

See all articles by Jill J. McCluskey

Jill J. McCluskey

Washington State University

Gordon C. Rausser

University of California, Berkeley - Department of Agricultural and Resource Economics


The dynamic effect of a hazardous waste site is analyzed by investigating the causal relationship between housing appreciation rates and house location in relation to a hazardous waste site using resale data from individual sales transactions in Dallas County, Texas. The results indicate that in the period in which the hazardous waste site was identified and cleanup occurred, residential property owners in close proximity to the hazardous waste site experienced lower housing appreciation rates. In the first post-cleanup period, they gained some of the lost ground with a higher appreciation rate. In a subsequent post-cleanup period, their appreciation fell in line with property owners whose properties are located farther away from the hazardous waste site. This suggests that a long-run equilibrium has been reached since appreciation rates were not significantly different across the Dallas housing market in the second post-cleanup period. Although the results indicate that adjustment takes time, an equilibrium is eventually reached for the houses in this repeat sales data set. An important implication of our analysis is that since the post-cleanup recovery was not immediate, property owners should be compensated for their loss of liquidity.

JEL Classification: R31, Q24

Suggested Citation

McCluskey, Jill and Rausser, Gordon C., Hazardous Waste Sites and Housing Appreciation Rates. Available at SSRN: https://ssrn.com/abstract=213890

Jill McCluskey

Washington State University ( email )

School of Economic Sciences
Pullman, WA 99164
509-335-2835 (Phone)

Gordon C. Rausser (Contact Author)

University of California, Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall no. 3310
Berkeley, CA 94720
United States
510-642-6591 (Phone)
510-643-0287 (Fax)

HOME PAGE: http://are.berkeley.edu/~rausser/

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