Paper Number: 2015-05
Document Date: 11/2015
Author(s): Dennis Guignet, Rachel Northcutt, and Patrick J. Walsh
Subject Area(s): Water Pollution; Valuation Methods; Non-Point Source Pollution; Valuation
Keywords: drinking water; groundwater; hedonic; nitrate; potable water; property value; water quality
Abstract: There are few studies examining the impacts of groundwater quality on residential property values. Using a unique dataset of groundwater well tests, we link residential transactions to home-specific contamination levels and undertake a hedonic analysis of homes in Lake County, Florida; where groundwater pollution concerns stem primarily from agricultural runoff. We find that testing and contamination yield a 2% to 6% depreciation, an effect that diminishes after the situation is resolved. Focusing specifically on nitrogen-based contamination, we find prices decline mainly at concentrations above the regulatory health standard, suggesting up to a 15% deprecation at levels twice the standard.
This paper is part of the Environmental Economics Working Paper Series.
You will need Adobe Reader to view some of the files on this page. See EPA’s About PDF page to learn more.