The Impact of Environmental Contamination on Condo Prices: A Hybrid Repeat-Sale/Hedonic Approach

31 Pages Posted: 19 Nov 2006

See all articles by Brad Case

Brad Case

Fannie Mae

Peter F. Colwell

University of Illinois

Chris Leishman

Heriot-Watt University

Craig Watkins

University of Sheffield - Department of Town and Regional Planning

Abstract

We extend the literature on the impact of externalities using an approach based on a hybrid of hedonic and repeat-sales methods. The externality in question is groundwater contamination in Scottsdale, Arizona. The use of condominium sales allows us to assume that major physical characteristics remain unchanged, but location parameters may be altered by urban growth and development as well as contamination. We find an economically significant discount for properties located in the contaminated area. Interestingly, it does not appear until several years after the contamination becomes publicly known, and it seems to have disappeared before the end of the study period.

Suggested Citation

Case, Bradford and Colwell, Peter F. and Leishman, Chris and Watkins, Craig, The Impact of Environmental Contamination on Condo Prices: A Hybrid Repeat-Sale/Hedonic Approach. Real Estate Economics, Vol. 34, No. 1, pp. 77-107, Spring 2006, Available at SSRN: https://ssrn.com/abstract=945530 or http://dx.doi.org/10.1111/j.1540-6229.2006.00160.x

Bradford Case (Contact Author)

Fannie Mae ( email )

3900 Wisconsin Avenue, NW
Washington, DC 20016-2892
United States
202-752-4221 (Phone)

Peter F. Colwell

University of Illinois ( email )

304B David Kinley Hall
1206 South Sixth Street
Champaign, IL 61820
United States
217-333-1185 (Phone)
217-244-3102 (Fax)

Chris Leishman

Heriot-Watt University ( email )

Riccarton
Edinburgh EH14 4AS, Scotland EH14 1AS
United Kingdom

Craig Watkins

University of Sheffield - Department of Town and Regional Planning ( email )

17 Mappin Street
Sheffield, Sheffield S1 4DT
United Kingdom

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