Tuesday, January 19, 2016

The Property Value Impacts of Groundwater Contamination: Agricultural Runoff and Private Wells Quick Links

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.
U.S. Environmental Protection Agency (EPA) www.EPA.gov National Center for Environmental Economics (NCEE) 
Working Paper Number: 2015-05; November 17, 2015
by Dennis Guignet, Rachel Northcutt, Patrick J. Walsh
Keywords: drinking water; groundwater; hedonic; nitrate; potable water; property value; water quality

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