Measuring the Impact of Shale Gas
Development on Property Values
Lucija Muehlenbachs
Resources for the Future
Beia Spiller
Environmental Defense Fund
Christopher Timmins
Duke University
MANAGING THE RISKS OF SHALE GAS DEVELOPMENT
Resources for the Future, June 27, 2013
[Insert intro text here]
•
[Insert bullet text here]
Hopewell Township, Pennsylvania.
Photo: Scott Goldsmith, National Geographic.
2
Groundwater concerns
[Insert intro text here]
•
[Insert bullet text here]
[Insert new paragraph here]
gasland
Photo: Rick Kintzel
Photo: Pittsburgh Student Environmental3 Coalitio
Introduction
Can impact property values:
• (+) from economic growth/royalties
• (-) from environmental risks/noise/landscape
Impacts may differ by:
• Proximity
• Drinking water source (groundwater vs. piped)
4
Objective
Estimate the effect on property values:
1.
2.
Proximity to a drilled well
Proximity to a permitted well
Identify the effect groundwater
contamination concerns have on property
values.
5
Strategy
-Determine distance at which a well has an
effect on property values
-Measure difference in property values
before and after a well is drilled
-Compare the difference between pipedwater homes and groundwater dependent
homes
6
Study Area: Washington County, PA
7
All Properties Sold 2004-2009
8
Finding Similar Properties
9
Identifying Extent of Impact
10
Findings from Washington County
Properties closer than 2km (1.2 mi) to a well pad:
• 10% increase
• Unless the property depends on groundwater: 16%
decrease
 Groundwater concerns cost 26% of property value
No effect from permitted, not drilled, wells
11
Caveat
Our identification strategy compares houses
inside and outside 2 km of a well:
• Impact is relative to overall changes in the
county
• Houses outside 2 km still exposed to shale gas
12
Future Work
 Overall impact on housing markets
 Data provided by CoreLogic:
 Marcellus and non-Marcellus Counties in PA
and bordering NY
 1994-2012
13
Property Sales in PA and NY, 1994-2012
Public Water Service Areas
Summary
 Use a combination of quasi-experimental
techniques and detailed geographic information
to recover the impacts of proximity to shale gas
wells.
 Significant positive impacts on piped-water
households.
 Significant negative impacts of shale gas
development on groundwater dependent
households.
Thank you!
muehlenbachs@rff.org