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The Effect of Undesirable Land Use Facilities on Property Values: New Evidence from Australian Regional Fossil-Fired Plants

Author

Listed:
  • Renuka K. Ganegodage

    (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia)

  • Peyman Khezr

    (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia)

  • Rabindra Nepal

    (CDU Business School, Charles Darwin University, Darwin, Australia)

Abstract

This paper investigates the effect of fossil-fired power plants on the value of neighborhood properties in the state of New South Wales, Australia. Fossil-fuels accounts for significant proportion of electricity generation in Australia. Thus, there are growing community concerns regarding the possible negative environmental effects of these power plants given the high level of emission produced by these plants. We use a comprehensive data with the exact location of each property to estimate the effect of an existing fossil-fuel power plant on the value of neighborhood properties. We use spatial econometric models to estimate these effects with controls over several characteristics of properties. Our results suggest that coal-fired power plants have significant negative effects on property values within a specific radius. These effects are less but still negative for gas and gas reciprocating power plants.

Suggested Citation

  • Renuka K. Ganegodage & Peyman Khezr & Rabindra Nepal, 2016. "The Effect of Undesirable Land Use Facilities on Property Values: New Evidence from Australian Regional Fossil-Fired Plants," Discussion Papers Series 569, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:569
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    File URL: https://economics.uq.edu.au/files/46180/569.pdf
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    References listed on IDEAS

    as
    1. Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, vol. 24(1), pages 1-14, January.
    2. Prasad Neelawala & Clevo Wilson & Wasantha Athukorala, 2013. "The impact of mining and smelting activities on property values: a study of Mount Isa city, Queensland, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 60-78, January.
    3. Gregory W. Fischer & M. Granger Morgan & Baruch Fischhoff & Indira Nair & Lester B. Lave, 1991. "What Risks Are People Concerned About," Risk Analysis, John Wiley & Sons, vol. 11(2), pages 303-314, June.
    4. Alicia N. Rambaldi & K. Renuka Ganegodage & Cameron S. Fletcher & Felix Lipkin, 2014. "Inundation and Views in Coastal Residential Property Values. Does the Sale Price Reflect the Trade Off?," Discussion Papers Series 536, School of Economics, University of Queensland, Australia.
    5. repec:bla:scandj:v:81:y:1979:i:2:p:154-73 is not listed on IDEAS
    6. Gibbons, Stephen, 2015. "Gone with the wind: Valuing the visual impacts of wind turbines through house prices," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 177-196.
    7. Okmyung Bin & Thomas W. Crawford & Jamie B. Kruse & Craig E. Landry, 2008. "Viewscapes and Flood Hazard: Coastal Housing Market Response to Amenities and Risk," Land Economics, University of Wisconsin Press, vol. 84(3), pages 434-448.
    8. Lucas W. Davis, 2011. "The Effect of Power Plants on Local Housing Values and Rents," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1391-1402, November.
    9. Sherman Folland & Robbin Hough, 2000. "Externalities of Nuclear Power Plants: Further Evidence," Journal of Regional Science, Wiley Blackwell, vol. 40(4), pages 735-753, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fossil-fired; power plants; emissions; property price;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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