Environmental Hazards and Local Investment: A Half-Century of Evidence from Abandoned Oil and Gas Wells

64 Pages Posted: 15 Sep 2020

See all articles by Max Harleman

Max Harleman

Health and Energy Economics Lab, University of Rochester Medical Center; University of Pittsburgh, Graduate School of Public & International Affairs, Students

Jeremy Weber

University of Pittsburgh - Graduate School of Public & International Affairs

Daniel Berkowitz

University of Pittsburgh - Department of Economics

Date Written: September 14, 2020

Abstract

Influential studies that generally cover a few years find that environmental hazards reduce property values and welfare. Over decades, however, hazards may further harm neighborhoods by discouraging investment. This paper exploits the quasi-random assignment of oil and gas wells that were and were not properly decommissioned (plugged) in a county in Western Pennsylvania. Over half a century, the two acres around unplugged wells had roughly half as much building as the area around plugged wells. Evidence suggests this reduction stems from disincentives to invest and not from poorer households sorting to properties near unplugged wells.

Keywords: environmental hazards; oil and gas wells; investment; real estate

JEL Classification: D23, R11, Q32, Q33

Suggested Citation

Harleman, Max and Harleman, Max and Weber, Jeremy and Berkowitz, Daniel, Environmental Hazards and Local Investment: A Half-Century of Evidence from Abandoned Oil and Gas Wells (September 14, 2020). USAEE Working Paper No. 20-470, Available at SSRN: https://ssrn.com/abstract=3692098 or http://dx.doi.org/10.2139/ssrn.3692098

Max Harleman

Health and Energy Economics Lab, University of Rochester Medical Center ( email )

Rochester, NY 14627
United States

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

Pittsburgh, PA 15260-0001
United States

Jeremy Weber (Contact Author)

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

Pittsburgh, PA 15260-0001
United States

Daniel Berkowitz

University of Pittsburgh - Department of Economics ( email )

4711 WWPH
Pittsburgh, PA 15260
United States
412-648-7072 (Phone)
412-648-3011 (Fax)

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

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