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Property values, water quality, and benefit transfer: A nationwide meta-analysis
Citation:
Guignet, D., Matthew Heberling, M. Papenfus, O. Griot, AND B. Holland. Property values, water quality, and benefit transfer: A nationwide meta-analysis. In Proceedings, Appalachian State University Department of Economics Working Paper Series, Boone, NC, April 24 - 25, 2020. Appalachian State University, Boone, NC, 20-04, (2020).
Impact/Purpose:
Our research proposes an approach to assess the benefits of improved water quality using existing, published hedonic property value studies. The hedonic method requires homeowners to be aware of and value changes in water quality such that it will be capitalized in their house prices. We examine the house price effects of water quality changes across different waterbodies and regions of the US. The existence of this meta-dataset and our meta-analysis provide a means for practitioners to conduct benefit transfer, and assess how improvements in water quality from local, regional, and even national policies are capitalized into housing values.
Description:
We conduct a comprehensive meta-analysis of 36 studies that examine the effects of water quality on housing values in the United States. The meta-dataset includes 656 unique estimates, and entails a cluster structure that accounts for property price effects at different distances from a waterbody. Focusing on water clarity, we estimate meta-regressions that account for within-cluster dependence, statistical precision, housing market and waterbody heterogeneity, publication bias, and best methodological practices. While we find evidence of systematic heterogeneity, the median out-of-sample transfer errors are relatively large. We discuss the implications for benefit transfer and identify future work to improve transfer performance.
