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The Effect Of Marijuana Dispensary Openings On Housing Prices

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  • Jesse Burkhardt
  • Matthew Flyr

Abstract

We evaluate the effect of medical and recreational dispensary openings on housing prices in Denver, Colorado. Using an event study approach, we find that the introduction of a new dispensary within a half‐mile radius of a new home increases home prices by approximately 7.7% on average. The effect diminishes for homes further from new dispensaries but is consistent over time. Our results provide important and timely empirical evidence on the socioeconomic impacts of marijuana legalization. (JEL R32, R38, R5)

Suggested Citation

  • Jesse Burkhardt & Matthew Flyr, 2019. "The Effect Of Marijuana Dispensary Openings On Housing Prices," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 462-475, July.
    • Handle: RePEc:bla:coecpo:v:37:y:2019:i:3:p:462-475
    DOI: 10.1111/coep.12414
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    References listed on IDEAS

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    1. Gabriel M. Ahlfeldt & Georgios Kavetsos, 2014. "Form or function?: the effect of new sports stadia on property prices in London," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 177(1), pages 169-190, January.
    2. Humphreys, Brad R. & Nowak, Adam, 2017. "Professional sports facilities, teams and property values: Evidence from NBA team departures," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 39-51.
    3. Carolyn A. Dehring & Craig A. Depken & Michael R. Ward, 2007. "The Impact Of Stadium Announcements On Residential Property Values: Evidence From A Natural Experiment In Dallas‐Fort Worth," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 627-638, October.
    4. Charles C. Tu, 2005. "How Does a New Sports Stadium Affect Housing Values? The Case of FedEx Field," Land Economics, University of Wisconsin Press, vol. 81(3).
    5. Pope, Devin G. & Pope, Jaren C., 2015. "When Walmart comes to town: Always low housing prices? Always?," Journal of Urban Economics, Elsevier, vol. 87(C), pages 1-13.
    6. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    7. Taggert J. Brooks & Brad R. Humphreys & Adam Nowak, 2016. "Strip Clubs, “Secondary Effects,†and Residential Property Prices," Working Papers 16-17, Department of Economics, West Virginia University.
    8. Cheng Cheng & Walter J. Mayer & Yanling Mayer, 2018. "The Effect Of Legalizing Retail Marijuana On Housing Values: Evidence From Colorado," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1585-1601, July.
    9. Lang, Corey & Opaluch, James J. & Sfinarolakis, George, 2014. "The windy city: Property value impacts of wind turbines in an urban setting," Energy Economics, Elsevier, vol. 44(C), pages 413-421.
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    Cited by:

    1. Christopher A. Ambrose & Benjamin W. Cowan & Robert E. Rosenman, 2021. "Geographical access to recreational marijuana," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 778-807, October.
    2. Jason Brown & Elior Cohen & Alison Felix, 2023. "Economic Benefits and Social Costs of Legalizing Recreational Marijuana," Research Working Paper RWP 23-10, Federal Reserve Bank of Kansas City.
    3. Eric L. Sevigny & Rosalie L. Pacula & Ariel M. Aloe & Danye N. Medhin & Jared Greathouse, 2021. "PROTOCOL: The effects of cannabis liberalization laws on health, safety, and socioeconomic outcomes: An evidence and gap map," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(1), March.
    4. Parisa Kavousi & Taylor Giamo & Gwen Arnold & Mateo Alliende & Elisabeth Huynh & Jaclyn Lea & Rachel Lucine & Alexandria Tillett Miller & Alana Webre & Aneka Yee & Adrianna Champagne‐Zamora & Keith Ta, 2022. "What do we know about opportunities and challenges for localities from Cannabis legalization?," Review of Policy Research, Policy Studies Organization, vol. 39(2), pages 143-169, March.
    5. Scott Callahan & David M. Bruner & Chris Giguere, 2021. "Smoke and Fears: The Effects of Marijuana Prohibition on Crime," Working Papers 21-12, Department of Economics, Appalachian State University.

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    More about this item

    JEL classification:

    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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