Shale Gas Development and Housing Values over a Decade: Evidence from the Barnett Shale

37 Pages Posted: 19 Jul 2014 Last revised: 17 Jan 2015

See all articles by Jeremy Weber

Jeremy Weber

University of Pittsburgh - Graduate School of Public & International Affairs

James Burnett

College of Charleston - Department of Economics & Finance

Irene Xiarchos

U.S. Department of Agriculture (USDA)

Date Written: July 17, 2014

Abstract

Extracting natural gas from shale formations can create local economic benefits such as public revenues but also disamenities such as truck traffic, both of which change over time. We study how shale gas development affected zip code level housing values in Texas’ Barnett Shale, which splits the Dallas-Fort Worth region in half and is the most extensively developed shale formation in the U.S. We find that housing in shale zip codes appreciated more than nonshale zip codes during peak development and less afterwards, with a net positive effect of five to six percentage points from 1997 to 2013. The greater appreciation in part reflects improved local public finances: the value of natural gas rights expanded the local tax base by $82,000 per student, increasing school revenues and expenditures. Within shale zip codes, however, an extra well per square kilometer was associated with a 1.6 percentage point decrease in appreciation over the study period.

Keywords: natural gas, property values, Barnett Shale

JEL Classification: Q32, Q33, H71, Q51

Suggested Citation

Weber, Jeremy and Burnett, James and Xiarchos, Irene, Shale Gas Development and Housing Values over a Decade: Evidence from the Barnett Shale (July 17, 2014). USAEE Working Paper No. 14-165. Available at SSRN: https://ssrn.com/abstract=2467622 or http://dx.doi.org/10.2139/ssrn.2467622

Jeremy Weber (Contact Author)

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

Pittsburgh, PA 15260-0001
United States

James Burnett

College of Charleston - Department of Economics & Finance ( email )

5 Liberty Street
Charleston, SC 29401
United States

Irene Xiarchos

U.S. Department of Agriculture (USDA) ( email )

1 Credit Union Place, Suite 320
Harrisburg, PA 17110
United States

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