The Value of Piped Water and Sewers: Evidence from 19th Century Chicago
50 Pages Posted: 7 Feb 2022 Last revised: 14 Mar 2022
Date Written: February 2022
We estimate the impact of piped water and sewers on property values in mid-19th century Chicago. The cost of sewer construction depends sensitively on imperceptible variation in grade, and such variations in grade delay water and sewer service to part of the city. This delay provides quasi-random variation for causal estimates. We extrapolate ATE estimates from our natural experiment to the area treated with water and sewer service during 1874-1880 using a new estimator. Water and sewer access increases property values by more than a factor of two. This exceeds costs by about a factor of 60.
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