The impact of water quality in Narragansett Bay on housing prices. Issue 8 (4th August 2017)

• Record Type: Journal Article
• Authors: Liu, Tingting; Opaluch, James J.; Uchida, Emi
• Is Part Of: Water resources research. Volume 53:Issue 8(2017)
• Page Start: 6454
• Page End: 6471
• Publication Date: 2017-08-04
• Subjects: hedonic modeling -- benefit transfer -- spatial econometrics -- scenario analysis -- water quality -- extreme events; Hydrology -- Periodicals; 333.91
• DOI: 10.1002/2016WR019606
• Languages: English
• ISSNs: 0043-1397

Abstract

Abstract: We examine the impact of water quality in Narragansett Bay on housing prices in coastal towns and cities using a hedonic housing‐price model. Unlike other hedonic studies of water quality, we test whether housing market responds to average water quality or more to extreme events. We also test the spatial and temporal extent of effects of water quality on housing prices. We find that poor coastal water quality, measured in terms of the concentration of chlorophyll, has a negative impact on housing prices that diminishes with distance from the shoreline. Furthermore, our finding suggests that housing prices are most influenced by the extreme environmental conditions, which may be accompanied by unpleasant odors, discoloration, and even fish kills. We further predict potential increases in home values associated under water quality improvement scenarios and find an increase in the values of homes in coastal communities along Narragansett Bay of about $18 million up to $136 million. Key Points: Examine the impact of water quality on housing prices spatially Test perceptions of water quality using different measures Find that people are more concerned with extreme events and the impact of water quality on housing prices varies by distance