45 Pages Posted: 22 Dec 2012 Last revised: 27 Dec 2012
Date Written: December 21, 2012
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.
Keywords: toxic pollutants, hedonic analysis, environmental health risks, local externalities
JEL Classification: D62, I18, Q51, Q53
Suggested Citation: Suggested Citation
Currie, Janet and Davis, Lucas W. and Greenstone, Michael and Walker, Reed, Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings (December 21, 2012). MIT Department of Economics Working Paper No. 12-30. Available at SSRN: https://ssrn.com/abstract=2192658 or http://dx.doi.org/10.2139/ssrn.2192658