Welfare Impacts of an Environmental Disamenity: A Survival Model Approach

21 Pages Posted: 17 Feb 2006

See all articles by Diane Hite

Diane Hite

Auburn University - Department of Agricultural Economics and Rural Sociology

Date Written: February 12, 2006

Abstract

A survival model of days until sale of a house is used to measure the welfare impact of a nearby environmental disamenity. The model controls for housing and neighborhood characteristics, isolating the effect of landfills on nearby transactions. I hypothesize that sellers may have more difficulty selling homes near landfills, resulting in potentially significant increases in opportunity cost of holding a property. Hedonic models, which have been widely used to measure welfare losses associated with a disamenity cannot capture the impacts I investigate. In a property level comparison, I find that the same house 5 miles from a landfill, as compared to 1 mile, is on the market an extra 24.7 days, incurring an average welfare loss of $473.44.

Keywords: Environmental Economics, Survival Models, House Prices

JEL Classification: A13, Q29, R15, R22

Suggested Citation

Hite, Diane, Welfare Impacts of an Environmental Disamenity: A Survival Model Approach (February 12, 2006). Available at SSRN: https://ssrn.com/abstract=883343 or http://dx.doi.org/10.2139/ssrn.883343

Diane Hite (Contact Author)

Auburn University - Department of Agricultural Economics and Rural Sociology ( email )

Comer Hall
Auburn, AL 36849
United States
334-844-5655 (Phone)
334-844-5639 (Fax)

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