Hazardous waste sites and housing appreciation rates

Abstract

Housing appreciation rates reflect the speed of the market's adjustment to equilibrium. The dynamic effect of a hazardous waste site is analyzed by investigating the causal relationship between housing appreciation rates and house location in relation to a hazardous waste site using resale data from individual sales transactions in Dallas County, Texas. The results indicate that residential property owners in close proximity to the hazardous waste site experienced lower housing appreciation rates after the time period when the US Environmental Protection Agency identified the site. The adjustment to equilibrium, as reflected in differential housing appreciation rates, can be quite lengthy in response to the identification and cleanup process for a hazardous waste site. The results suggest that cleanup actions are not as important as new information that the area surrounding the site is a dangerous place. © 2003 Elsevier Science (USA). All rights reserved.