Journal
ENERGY ECONOMICS
Volume 61, Issue -, Pages 351-362Publisher
ELSEVIER
DOI: 10.1016/j.eneco.2016.11.010
Keywords
Hydraulic fracturing; Spatial dependence; Hedonic valuation
Categories
Funding
- TCU Center for Urban Studies
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In this study we estimate the effect of hydraulically fractured natural gas wells on residential real estate prices. We exploit variation in distance to nearby gas wells in home sale prices to estimate this effect. In contrast to previous studies, we focus on a relatively densely populated area, a section of the Dallas-Ft. Worth-Arlington urban area. Using a dataset of 127,556 observations from Tarrant County, Texas over the period 2005-2011, we find robust evidence that increased proximity to a well leads to reduced home sale prices. Existence of wells within 3500 ft of a property reduces property values by approximately 1.5-3%. We demonstrate that the reduction seems to be driven by unconventional rather than conventional wells, and that well construction causes an added 1-2% reduction in home value. (C) 2016 Elsevier B.V. All rights reserved.
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