Spatial Hedonic Analysis of the Effects of US Wind Energy Facilities on Surrounding Property Values

Posted: 29 May 2015

See all articles by Ben Hoen

Ben Hoen

University of California, Berkeley - Lawrence Berkeley National Laboratory (Berkeley Lab)

Jason Brown

Federal Reserve Bank of Kansas City

Thomas Jackson

Texas A&M University - Department of Finance

Mark Thayer

San Diego State University - Department of Economics

Ryan Wiser

Lawrence Berkeley National Laboratory (Berkeley Lab)

Peter Cappers

University of California, Berkeley - Lawrence Berkeley National Laboratory (Berkeley Lab)

Date Written: May 27, 2015

Abstract

Rapid, large-scale U.S. deployment of wind turbines is expected to continue in the coming years. Because some of that deployment is expected to occur in relatively populous areas, concerns have arisen about the impact of turbines or nearby home values. Previous research on the effects of wind turbines on surrounding home values has been limited by small home-sale data samples and insufficient consideration of confounding home-value factors and spatial dependence. This study examines the largest set of turbine-proximal sales data to date: more than 50,000 home sale including 1,198 within 1 mile of a turbine (331 of which were within a half mile). The data span the periods well before announcement of the wind facilities to well after their construction. We use ordinary least squares and spatial-process difference-in-difference hedonic models to estimate the home-value impacts of the wind facilities, controlling for value factors existing prior to the wind facilities' announcements, the spatial dependence of home values, and value changes over time. A series of robustness models provide greater confidence in the results. We find no statistical evidence that home values near turbines were affected in the turbine post-construction or post-announcement/pre-construction periods.

Keywords: Turbines; Wind; Property value; Price; Hedonic; Spatial

Suggested Citation

Hoen, Ben and Brown, Jason and Jackson, Thomas and Thayer, Mark and Wiser, Ryan and Cappers, Peter, Spatial Hedonic Analysis of the Effects of US Wind Energy Facilities on Surrounding Property Values (May 27, 2015). Journal of Real Estate Finance and Economics, Vol. 51, No. 1, 2015, Available at SSRN: https://ssrn.com/abstract=2611199

Ben Hoen (Contact Author)

University of California, Berkeley - Lawrence Berkeley National Laboratory (Berkeley Lab) ( email )

Milan, NY 12571
United States

Jason Brown

Federal Reserve Bank of Kansas City ( email )

1 Memorial Dr.
Kansas City, MO 64198
United States

Thomas Jackson

Texas A&M University - Department of Finance ( email )

430 Wehner
College Station, TX 77843-4218
United States

Mark Thayer

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States

Ryan Wiser

Lawrence Berkeley National Laboratory (Berkeley Lab) ( email )

Milan, NY 12571
United States

Peter Cappers

University of California, Berkeley - Lawrence Berkeley National Laboratory (Berkeley Lab) ( email )

Milan, NY 12571
United States

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