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Perceived Environmental Risk, Media and Residential Sales Prices

Author

Listed:
  • Julia Freybote

    (Portland State University)

  • Eric Fruits

    (Portland State University)

Abstract

We investigate the relationship of homebuyer risk perception and sales prices over different development stages of an environmental hazard (underground natural gas transmission pipeline) characterized by no sensory impact on homes, no accidents and a relatively low actual risk of fatal explosions. We also investigate the moderating effect of media coverage of unrelated fatal pipeline explosions on this relationship. Using a hedonic pricing model, we find that 1) media coverage moderates the relationship of pipeline proximity (perceived risk) and sales prices in the pipeline construction phase and 2) higher perceived risk reduces sales prices once the pipeline is in operation.

Suggested Citation

  • Julia Freybote & Eric Fruits, 2015. "Perceived Environmental Risk, Media and Residential Sales Prices," Journal of Real Estate Research, American Real Estate Society, vol. 37(2), pages 217-244.
    • Handle: RePEc:jre:issued:v:37:n:2:2015:p:217-244
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    Citations

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    Cited by:

    1. Tsur Somerville & Jake Wetzel, 2022. "Environmental hazards: The microgeography of land‐use negative externalities," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 468-497, June.
    2. Wen‐Chi Liao & Yilan Luo & Yajie Sun, 2022. "Information shock of disaster and hazard: Impact of Kaohsiung gas explosions and risk disclosure on the equalizing difference in the housing market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(6), pages 1492-1531, November.
    3. Xun Fan & Mengdi Liu & Bing Zhang & Weicheng Zhang, 2024. "The Green Premium: Environmental Regulation, Environmental Risk and Property Value," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(5), pages 1061-1096, May.
    4. Bogdan Benon & Barańska Anna, 2024. "Compensation for Establishing Transmission Line Easement: Parts of Land Affected and Persons Involved," Real Estate Management and Valuation, Sciendo, vol. 32(3), pages 53-63.
    5. Boslett, Andrew & Hill, Elaine, 2019. "Shale gas transmission and housing prices," Resource and Energy Economics, Elsevier, vol. 57(C), pages 36-50.
    6. Yaoxuan Huang & Tsz Leung Yip & Cong Liang, 2020. "Risk Perception and Property Value: Evidence from Tianjin Port Explosion," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    7. Lee, Brian & Wang, Szu-Yung & Lin, Tzu-Chin & Chang, Hung-Hao, 2021. "Underground pipeline explosions and housing prices: Quasi-experimental evidence from an urban city," Land Use Policy, Elsevier, vol. 111(C).

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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