Brand New Research Examines Property Values Near Fracking Sites
18 September 2012 2:01PM
Professor Christopher Timmins, along with co-authors Lucija Muehlenbachs and Elisheba Spiller, has conducted new research on hydraulic fracturing, commonly known as "fracking."
"Shale Gas Development and Property Values: Differences Across Drinking Water Sources" seeks to examine the effects of fracking on the housing market.
"The overall lack of research regarding the impacts on property values from proximity to shale gas wells hinders the ability of the government to regulate optimally, both at the national and local levels," write the three researchers. "This paper helps to fill that void."
Following is the abstract of the paper:
While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.