The Impact of Wetlands Rules on the Prices of Regulated and Proximate Houses: A Case Study

Federal, state and local wetlands protection laws that restrict landowners’ ability to develop their properties in certain ways could decrease the value of the affected properties. However, the regulations could also give benefits to nearby neighbors who no longer need worry about increased development in their area. Given that some properties may decline in value, while others increase, the impact on individual properties must be determined empirically. This study uses a data set from Newton, Massachusetts to examine the impact of wetlands laws on the regulated properties, as well as on proximate properties. Looking at house sales data from 1988 through 2005, the hedonic technique is used to estimate the effect of wetlands regulations on single family home prices and finds that having wetlands on a property decreases its value by 4% relative to non-regulated properties. Homes that are contiguous to regulated houses do not experience any change in price. Thus it seems unlikely that neighbors are receiving any benefit from knowing that further development is restricted in their immediate vicinity.Environment, housing, amenities, hedonic pricing, wetlands

Environmental Contamination and House Values: A Study of Market Adjustment

In many communities throughout the United States, contaminated sites are identified and addressed by the Environmental Protection Agency (EPA). In each of these communities, the EPA presents a plan of action and provides the community with information about progress being made. Does the housing market adjust quickly after announcements by EPA concerning the existence and toxicity of Superfund sites? Other studies have shown that the levels of house prices fall when people suspect there is a problem, and again when the EPA announces that the site is toxic (e.g. Kiel, 1995), but how can we tell when or if the market has completely adjusted to the existence of such a site? If the site is always perceived as an externality, then the coefficient on distance from the house to the site in the hedonic regression on house values should remain statistically significant and negative. Thus merely looking at the coefficient does not aid in determining when, or if, the market has cleared.hedonic models, environmental prices, housing, adjustment process

Environmental Contamination and House Values

A house is a bundle of many goods: The number of bedrooms, bathrooms, the quality of local public services, the tidiness of a neighbor’s yard, and the quality of the local environment. If transactions in the housing market reflect the interaction of informed buyers and sellers, then the price that the house sells for is the sum of the prices the buyer is willing to pay for each individual characteristic of the house. It is this notion that motivates environmental economists to study property values. If individuals consider the local environment as a component of the house they purchase, then information on the house and its sales price allows researchers to ‘tease out’ the price that individuals would be willing to pay for environmental goods. This approach relies on the use of the hedonic price model.hedonic models, environmental prices, housing

An Analysis of the Impact of Multiple Environmental Goods on House Prices

It seems an established empirical fact that Superfund sites lower local property values. Two recent literature reviews (Farber, 1998, Boyle and Kiel, 2001) report that published academic papers on the topic verify that point. The EPA’s approach assumes that all sites negatively impact property values, and that the impact is similar for all sites. This paper examines 74 National Priorities List (NPL) sites in 13 U.S. counties in order to test these two implicit assumptions. Following the hedonic approach of Kiel (1995) and Kiel and McClain (1995), we find that some sites have the expected negative impact, while other sites have either no impact or a positive impact on local property values. We also consider the possibility of ‘stigma’ from sites by looking at those sites that have been cleaned during our sample period and find that some sites do appear to suffer from stigma, while others do not. We then use a meta-analysis approach to examine what factors affect the likelihood and extent of a decrease in property values near the sites. We find that larger sites in areas with fewer blue-collar workers are more likely to have the expected negative impact on local house prices.Environment, Superfund, Hedonic regressions, meta-analysis, property values

Environmental Contamination and House Values

A house is a bundle of many goods: The number of bedrooms, bathrooms, the quality of local public services, the tidiness of a neighbor’s yard, and the quality of the local environment. If transactions in the housing market reflect the interaction of informed buyers and sellers, then the price that the house sells for is the sum of the prices the buyer is willing to pay for each individual characteristic of the house. It is this notion that motivates environmental economists to study property values. If individuals consider the local environment as a component of the house they purchase, then information on the house and its sales price allows researchers to ‘tease out’ the price that individuals would be willing to pay for environmental goods. This approach relies on the use of the hedonic price model

Environmental Contamination and House Values: A Study of Market Adjustment

In many communities throughout the United States, contaminated sites are identified and addressed by the Environmental Protection Agency (EPA). In each of these communities, the EPA presents a plan of action and provides the community with information about progress being made. Does the housing market adjust quickly after announcements by EPA concerning the existence and toxicity of Superfund sites? Other studies have shown that the levels of house prices fall when people suspect there is a problem, and again when the EPA announces that the site is toxic (e.g. Kiel, 1995), but how can we tell when or if the market has completely adjusted to the existence of such a site? If the site is always perceived as an externality, then the coefficient on distance from the house to the site in the hedonic regression on house values should remain statistically significant and negative. Thus merely looking at the coefficient does not aid in determining when, or if, the market has cleared

The Impact of Wetlands Rules on the Prices of Regulated and Proximate Houses: A Case Study

Federal, state and local wetlands protection laws that restrict landowners’ ability to develop their properties in certain ways could decrease the value of the affected properties. However, the regulations could also give benefits to nearby neighbors who no longer need worry about increased development in their area. Given that some properties may decline in value, while others increase, the impact on individual properties must be determined empirically. This study uses a data set from Newton, Massachusetts to examine the impact of wetlands laws on the regulated properties, as well as on proximate properties. Looking at house sales data from 1988 through 2005, the hedonic technique is used to estimate the effect of wetlands regulations on single family home prices and finds that having wetlands on a property decreases its value by 4% relative to non-regulated properties. Homes that are contiguous to regulated houses do not experience any change in price. Thus it seems unlikely that neighbors are receiving any benefit from knowing that further development is restricted in their immediate vicinity

Stealing History: How does Provenance Affect the Price of Antiquities?

In 1982, the United States passed legislation that partially implemented the UNESCO Treaty, the Cultural Property Implementation Act. Despite the fact that the United States signed onto this treaty, it was common knowledge in the antiquities world that the enforcement of these laws has been lax, and the illegal sale of artifacts has continued. In December 2005, the Italian government took the Curator of Antiquities at the Getty Museum Marion True and Robert Hecht (a well-known antiquities dealer) to trial for conspiracy to buy and sell looted artifacts. This paper tests whether a good provenance increases the price of an antiquity and also whether the impact of appropriate provenance has changed since the trial began. To test these hypotheses, a hedonic regression on sales prices of provenanced and unprovenanced artifacts is estimated. We find that provenanced items are indeed selling for higher prices after 2005, ceteris paribus, which is evidence that the art market has responded to the law suits

The Effect of Sports Franchises on Property Values: The Role of Owners versus Renters

This paper estimates the public benefits to homeowners in cities with NFL franchises by examining housing prices rather than housing rents. In contrast to Carlino and Coulson (2004) we find that the presence of an NFL franchise has no effect on housing prices in a city. Furthermore, we also test whether the presence and size of the subsidy to the team affects values and find that higher subsidies for NFL stadium construction lead to lower house prices. This suggests that the benefits that homeowners receive from the presence of a team are negated by the increased tax burden due to the subsidies paid to the franchises.impact analysis, stadiums, football, mega-event, tourism

Luck or Skill? An Examination of the Ehrlich - Simon Bet

In 1980, Paul Ehrlich and Julian Simon placed a famous bet on whether the prices of a bundle of natural resources would rise or fall over the ensuing decade. Simon won the bet as the real price of the bundle fell significantly, and the result of this bet has been taken as proof that technological progress is likely overcome any Neo-Malthusian concerns about natural resource scarcity. Contrary to the popular perception, however, an examination of the price history of the identical bundle of goods from 1900-2007 shows that Ehrlich and not Simon would have won a majority of the bets over the past century and would have done so by a wide margin.Natural resources, scarcity, Neo-Malthusian