Sunday, October 30, 2016

Renewable energy and negative externalities: The effect of wind turbines on house prices

In many countries, wind turbines are constructed as part of a strategy to reduce dependence on fossil fuels. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby houses. A unique Dutch house price dataset covering the period 1985–2011 is used, as well as the exact location of all wind turbines that were built in the Netherlands. Using a difference-in-differences methodology we find a 1.4% price decrease for houses within 2 km of a turbine. There is also evidence for anticipation effects a few years before placement of a turbine. The effect is larger for taller turbines and in urban areas. Especially the first turbine built close to a house has a negative effect on its price.
by Martijn I. Dröes 1, 2, 3, 4 and Hans R.A. Koster 2 and 4
Journal of Urban Economics via Elsevier Science Direct
Volume 96, November 2016, Pages 121–141
Keywords: Renewable energy; Wind turbines; Externalities; House prices

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