The impacts of underground petroleum releases on a homeowner's decision to sell: A difference-in-differences approach

Actual and perceived damages from environmental disamenities can disrupt a utility maximizing household's otherwise optimal decision of when to sell their home. This study examines this relatively under-investigated topic with an empirical application to petroleum releases from leaking undergro...

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Bibliographic Details
Published in:Regional science and urban economics 2018-03, Vol.69, p.11-24
Main Authors: Guignet, Dennis B., Martinez-Cruz, Adan L.
Format: Article
Language:English
Subjects:
Discrete time duration model
Gas leaks
Groundwater contamination
Groundwater pollution
Hazardous materials
Homeowners associations
Homogeneity
Housing market
Industrial wastes
Occupational safety
Petroleum
Property transaction
Sales
Service stations
Storage tanks
Studies
Timing
Underground storage
Underground storage tank
Underground storage tanks
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Summary:Actual and perceived damages from environmental disamenities can disrupt a utility maximizing household's otherwise optimal decision of when to sell their home. This study examines this relatively under-investigated topic with an empirical application to petroleum releases from leaking underground storage tanks, like those commonly found at gas stations. The ubiquity and relative homogeneity of this disamenity facilitates a difference-in-differences methodology. The results reveal that the timing of home sales is impacted by leak and cleanup events at these disamenities; leading to both selling sooner and delaying a sale, depending on the event, presence of the primary exposure pathway, and the quality of the home. The implications of these results are discussed. •Difference-in-differences study of households' decisions to sell home.•Focus on impact of leaking underground storage tanks in Maryland, USA.•Discrete time duration models suggest timing of sale can be sooner or delayed.•Find heterogeneity based on exposure pathway, treatment events, and home quality.
ISSN:0166-0462
1879-2308
DOI:10.1016/j.regsciurbeco.2017.12.006