Sowing the Wind and Reaping the Whirlwind? The Effect of Wind Turbines on Residential Well-Being

81 Pages Posted: 6 Jun 2015

See all articles by Christian Krekel

Christian Krekel

Paris School of Economics (PSE); Centre for Economic Performance (CEP), London School of Economics (LSE); World Bank

Alexander Zerrahn

German Institute for Economic Research (DIW Berlin)

Date Written: June 1, 2015

Abstract

We investigate the effect of the physical presence of wind turbines on residential well-being in Germany, using panel data from the German Socio-Economic Panel (SOEP) and a unique novel panel data set on more than 20,000 wind turbines for the time period between 2000 and 2012. Using a Geographical Information System (GIS), we calculate the proximity between households and the nearest wind turbine as the most important determinant of their disamenities, e.g. visual interference into landscape aesthetics. Our unique novel panel data set on wind turbines, which was collected at the regional level, includes their exact geographical coordinates and construction dates. This allows estimating the causal effect of the physical presence of wind turbines on residential well-being, using a difference-in-differences design. To ensure comparability of the treatment and control group, we apply propensity-score and novel spatial matching techniques based on exogenous weather data and geographical locations of residence, respectively. We show that the construction of a wind turbine within a treatment radius of 4,000 metres around households has a significantly negative effect on life satisfaction. For larger treatment radii, no negative externalities can be detected. Moreover, the effect is transitory, vanishing after five years at the latest. As wind turbines are addressed at avoiding negative externalities of local pollutant and global greenhouse gas emissions, they fulfill an important role in the de-carbonization of electricity systems world-wide. Comparing the imposed spatially and temporally limited externalities with the avoided externalities from emissions, the positive impact of wind turbines is by several magnitudes higher than the negative.

Keywords: Life Satisfaction, Social Acceptance, Wind Power, Wind Turbines, Renewables, Externalities, SOEP, GIS, Spatial Analysis

JEL Classification: C23, Q42, Q51, R20

Suggested Citation

Krekel, Christian and Zerrahn, Alexander, Sowing the Wind and Reaping the Whirlwind? The Effect of Wind Turbines on Residential Well-Being (June 1, 2015). SOEPpaper No. 760, Available at SSRN: https://ssrn.com/abstract=2614805 or http://dx.doi.org/10.2139/ssrn.2614805

Christian Krekel (Contact Author)

Paris School of Economics (PSE)

48 Boulevard Jourdan
Paris, 75014 75014
France

HOME PAGE: http://www.parisschoolofeconomics.eu/en/

Centre for Economic Performance (CEP), London School of Economics (LSE)

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://cep.lse.ac.uk/

World Bank

1818 H Street, NW
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/

Alexander Zerrahn

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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