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The Value of Piped Water and Sewers: Evidence from 19th Century Chicago

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  • Michael Coury
  • Toru Kitagawa
  • Allison Shertzer
  • Matthew Turner

Abstract

We estimate the impact of piped water and sewers on property values in late-19th century Chicago. The cost of sewer construction depends sensitively on imperceptible variation in elevation, and such variation delays water and sewer service to part of the city. This delay provides quasi-random variation for causal estimates. We extrapolate ATE estimates from our natural experiment to the area treated with water and sewer service during 1874-1880 using a new estimator. Water and sewer access increases property values by more than a factor of two. This exceeds costs by about a factor of 60.

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  • Michael Coury & Toru Kitagawa & Allison Shertzer & Matthew Turner, 2022. "The Value of Piped Water and Sewers: Evidence from 19th Century Chicago," NBER Working Papers 29718, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29718
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    More about this item

    JEL classification:

    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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