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Unconvensional Shale Gas Development and Real Estate Valuation Issues

Author

Listed:
  • Lipscomb, Clifford

    (Greenfield Advisors)

  • Wang, Yongsheng

    (Washington and Jefferson College)

  • Kilpatrick, Sarah J.

    (Greenfield Advisors)

Abstract

This article provides an overview of the real estate valuation issues related to unconventional shale gas activities, particularly those related to hydraulic fracturing or “fracking.” With the research on this topic in its infancy, we focus more on the valuation issues that can arise as opposed to those that have arisen. Central to this discussion are the factors associated with fracking activities that could alter the existing risk context of real estate valuation in communities and the role that information plays in developing risk perceptions. As current examples of these issues, we discuss some specific legal and regulatory changes that have arisen in Pennsylvania.

Suggested Citation

  • Lipscomb, Clifford & Wang, Yongsheng & Kilpatrick, Sarah J., 2012. "Unconvensional Shale Gas Development and Real Estate Valuation Issues," The Review of Regional Studies, Southern Regional Science Association, vol. 42(2), pages 161-175, Summer.
    • Handle: RePEc:rre:publsh:v:42:y:2012:i:2:p:161-175
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    References listed on IDEAS

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    1. Paula Bernstein & Thomas C Kinnaman & Mengqi Wu, 2013. "Estimating Willingness to Pay for River Amenities and Safety Measures Associated with Shale Gas Extraction," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 28-44.
    2. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2012. "Shale Gas Development and Property Values: Differences across Drinking Water Sources," NBER Working Papers 18390, National Bureau of Economic Research, Inc.
    3. Boxall, Peter C. & Chan, Wing H. & McMillan, Melville L., 2005. "The impact of oil and natural gas facilities on rural residential property values: a spatial hedonic analysis," Resource and Energy Economics, Elsevier, vol. 27(3), pages 248-269, October.
    4. Mats Wilhelmsson, 2000. "The Impact of Traffic Noise on the Values of Single-family Houses," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 43(6), pages 799-815.
    5. Jill J. McCluskey & Gordon C. Rausser, 2001. "Estimation of Perceived Risk and Its Effect on Property Values," Land Economics, University of Wisconsin Press, vol. 77(1), pages 42-55.
    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..
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    8. Clifford Lipscomb, 2011. "Using contingent valuation to measure property value impacts," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 29(4/5), pages 448-459, July.
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    Cited by:

    1. Balthrop, Andrew T. & Hawley, Zackary, 2017. "I can hear my neighbors' fracking: The effect of natural gas production on housing values in Tarrant County, TX," Energy Economics, Elsevier, vol. 61(C), pages 351-362.
    2. Long, Michael A. & Ritchie, Liesel A. & Stretesky, Paul B. & Sibley, Martha, 2024. "Perceptions of social disruption in communities that experienced induced seismicity from hydraulic fracturing in Colorado and Oklahoma, USA," Resources Policy, Elsevier, vol. 91(C).
    3. Munasib, Abdul & Rickman, Dan S., 2015. "Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 1-17.
    4. Kim, Byung-Cheol & Oliver, Matthew E., 2017. "Taming drillers through legislative action: Evidence from Pennsylvania’s shale gas industry," Resource and Energy Economics, Elsevier, vol. 50(C), pages 15-35.

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    More about this item

    Keywords

    unconventional shale gas; hydraulic fracturing; valuation;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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