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Does Proximity to a Power Plant Affect Housing Property Values of a City in South Korea? An Empirical Investigation

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  • Ju-Hee Kim

    (Department of Future Energy Convergence, College of Creativity and Convergence Studies, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea)

  • Young-Kuk Kim

    (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea)

  • Seung-Hoon Yoo

    (Department of Future Energy Convergence, College of Creativity and Convergence Studies, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Republic of Korea)

Abstract

The South Korean government plans to switch from a centralized power generation method to a distributed one. However, due to opposition from local residents, construction of distributed power plants is frequently delayed or suspended. This study attempts to investigate whether proximity to a power plant negatively affects housing property values, using the hedonic pricing technique and quantitatively analyzing the level of impact. To this end, 2291 apartment sales data from a specific city in the South Korean Seoul Metropolitan area with a power plant were used. As a result of the analysis, it was found that proximity to a power plant had a negative effect on apartment prices, which was statistically significant at the significance level of 5%. The difference in apartment prices per 1 km direct distance from the power plant to the apartment was derived as KRW 8 million (USD 7.1 thousand). This value is about 0.7% of the average price of apartments in the area (KRW 1102 million = USD 0.98 thousand). The results of this study can be used as a useful reference when the government determines the size of subsidies for local residents near power plants.

Suggested Citation

  • Ju-Hee Kim & Young-Kuk Kim & Seung-Hoon Yoo, 2023. "Does Proximity to a Power Plant Affect Housing Property Values of a City in South Korea? An Empirical Investigation," Energies, MDPI, vol. 16(4), pages 1-14, February.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:4:p:1983-:d:1071125
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    References listed on IDEAS

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