IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/122635.html
   My bibliography  Save this paper

Are friends electric? Valuing the social costs of power lines using house prices

Author

Listed:
  • Tang, Cheng Keat
  • Gibbons, Stephen

Abstract

Overhead electrical power lines and pylons have long raised concerns regarding the effects of electromagnetic fields on health, noise pollution and the visual impact on rural landscapes. These issues are once again salient because of the need for new lines to connect sources of renewable energy to the grid. In this study we provide new evidence on the cost implied by these externalities, as revealed in house prices. We use a spatial difference-in-difference approach that compares price changes in neighborhoods that are close to overhead power-lines, before and after they are constructed, with price changes in comparable neighborhoods further away. Our findings suggest that the construction of new overhead pylons reduces prices by 3.9% for properties up to 1500 m away, suggesting the impacts extend further than previously estimated.

Suggested Citation

  • Tang, Cheng Keat & Gibbons, Stephen, 2024. "Are friends electric? Valuing the social costs of power lines using house prices," LSE Research Online Documents on Economics 122635, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:122635
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/122635/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. ., 2008. "Modeling the Effects of Research and Development," Chapters, in: Industrial Innovation and Firm Performance, chapter 6, pages 62-84, Edward Elgar Publishing.
    2. Dröes, Martijn I. & Koster, Hans R.A., 2016. "Renewable energy and negative externalities: The effect of wind turbines on house prices," Journal of Urban Economics, Elsevier, vol. 96(C), pages 121-141.
    3. Steve Gibbons, 2004. "The Costs of Urban Property Crime," Economic Journal, Royal Economic Society, vol. 114(499), pages 441-463, November.
    4. Charles J. Delaney & Douglas Timmons, 1992. "High Voltage Power Lines: Do They Affect Residential Property Value?," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 315-330.
    5. Tang, Cheng Keat, 2021. "The Cost of Traffic: Evidence from the London Congestion Charge," Journal of Urban Economics, Elsevier, vol. 121(C).
    6. Giles Atkinson & Brett Day & Susana Mourato & Charles Palmer, 2004. "'Amenity' or 'eyesore'? Negative willingness to pay for options to replace electricity transmission towers," Applied Economics Letters, Taylor & Francis Journals, vol. 11(4), pages 203-208.
    7. Stanley W. Hamilton & Gregory M. Schwann, 1995. "Do High Voltage Electric Transmission Lines Affect Property Value?," Land Economics, University of Wisconsin Press, vol. 71(4), pages 436-444.
    8. Francois Des Rosiers, 2002. "Power Lines, Visual Encumbrance and House Values: A Microspatial Approach to Impact Measurement," Journal of Real Estate Research, American Real Estate Society, vol. 23(3), pages 275-302.
    9. ., 2008. "The Cost of Industrial Research and Development," Chapters, in: Industrial Innovation and Firm Performance, chapter 5, pages 53-61, Edward Elgar Publishing.
    10. ., 2008. "Tax incentives for research and development," Chapters, in: Taxes and the Economy, chapter 6, pages 221-236, Edward Elgar Publishing.
    11. Gaur, Vasundhara & Lang, Corey, 2023. "House of the rising sun: The effect of utility-scale solar arrays on housing prices," Energy Economics, Elsevier, vol. 122(C).
    12. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    13. Peter F. Colwell, 1990. "Power Lines and Land Value," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 117-128.
    14. Lucas W. Davis, 2004. "The Effect of Health Risk on Housing Values: Evidence from a Cancer Cluster," American Economic Review, American Economic Association, vol. 94(5), pages 1693-1704, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Thomas & Gerd Welke, 2017. "The Effect of HVTLs on Property Values: An Event Study," International Real Estate Review, Global Social Science Institute, vol. 20(2), pages 167-187.
    2. Tang, Cheng Keat & Gibbons, Steve, 2023. "Are friends electric? Valuing the social costs of power lines using house prices," LSE Research Online Documents on Economics 121288, London School of Economics and Political Science, LSE Library.
    3. Sally Sims & Peter Dent, 2005. "High-voltage Overhead Power Lines and Property Values: A Residential Study in the UK," Urban Studies, Urban Studies Journal Limited, vol. 42(4), pages 665-694, April.
    4. Muñoz-Morales, Juan & Singh, Ruchi, 2023. "Do school shootings erode property values?," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    5. Olivier JOALLAND & Tina RAMBONILAZA, 2017. "Assessing the impact of renewable energy infrastructure on the “tourist value” in rural landscapes: a spatial hedonic approach," Cahiers du GREThA (2007-2019) 2017-10, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    6. Jesse Matheson & Brendon McConnell & James Rockey & Argyris Sakalis, 2023. "Do Remote Workers Deter Neighborhood Crime? Evidence from the Rise of Working from Home," Working Papers 2023020, The University of Sheffield, Department of Economics.
    7. Cohen, Jed J. & Moeltner, Klaus & Reichl, Johannes & Schmidthaler, Michael, 2016. "Linking the value of energy reliability to the acceptance of energy infrastructure: Evidence from the EU," Resource and Energy Economics, Elsevier, vol. 45(C), pages 124-143.
    8. Olivier JOALLAND & Tina RAMBONILAZA, 2017. "Valeur touristique des aménités environnementales et nuisances associées aux infrastructures d’énergie renouvelable : une approche hédonique spatiale," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 46, pages 93-115.
    9. Stephen Gibbons & Cheng Keat Tang, 2023. "Are friends electric? Valuing the social costs of power lines using house prices," CEP Discussion Papers dp1942, Centre for Economic Performance, LSE.
    10. McNair, Ben J. & Bennett, Jeff & Hensher, David A., 2011. "A comparison of responses to single and repeated discrete choice questions," Resource and Energy Economics, Elsevier, vol. 33(3), pages 554-571, September.
    11. Giaccaria Sergio & Frontuto Vito & Dalmazzone Silvana, 2010. "Who’s afraid of power lines? Merging survey and GIS data to account for spatial heterogeneity," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201002, University of Turin.
    12. Timothy Besley & Hannes Mueller, 2012. "Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland," American Economic Review, American Economic Association, vol. 102(2), pages 810-833, April.
    13. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    14. Stefano Cellini & Francisco Nobre, 2023. "Business Improvement Districts and Housing Markets: Evidence from Neighborhoods in London," School of Economics Discussion Papers 0523, School of Economics, University of Surrey.
    15. Tang, Cheng Keat, 2021. "The Cost of Traffic: Evidence from the London Congestion Charge," Journal of Urban Economics, Elsevier, vol. 121(C).
    16. Congdon-Hohman, Joshua M., 2013. "The lasting effects of crime: The relationship of discovered methamphetamine laboratories and home values," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 31-41.
    17. Yeh, Susan, 2015. "Revealing the rapist next door: Property impacts of a sex offender registry," International Review of Law and Economics, Elsevier, vol. 44(C), pages 42-60.
    18. Chang, Zheng & Li, Jing, 2018. "The impact of in-house unnatural death on property values: Evidence from Hong Kong," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 112-126.
    19. Fenrick, Steve A. & Getachew, Lullit, 2012. "Cost and reliability comparisons of underground and overhead power lines," Utilities Policy, Elsevier, vol. 20(1), pages 31-37.
    20. Silvia Banfi & Massimo Filippini & Andrea Horehájová, 2008. "Valuation of Environmental Goods in Profit and Non-Profit Housing Sectors: Evidence from the Rental Market in the City of Zurich," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(IV), pages 631-654, December.

    More about this item

    Keywords

    externalities; overhead power lines; pylons; house prices; revealed preferences; Centre for Economic Performance;
    All these keywords.

    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
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:122635. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.