Does cleanup of hazardous waste sites raise housing values? Evidence of spatially localized benefits

Economists often rely on publicly available data provided at coarse geographical resolution to value spatially localized amenities. We propose a simple refinement to the hedonic method that accommodates this reality: specifically, we measure localized benefits from the cleanup of hazardous waste sites at the sub-census tract level by examining the entire within-tract housing value distribution, rather than simply focusing on the tract median. Our point estimates indicate that the cleanup leads to larger appreciation in house prices at the lower percentiles of the within-tract house value distribution than at higher percentiles. Though not statistically different from one another, the estimates are monotonically ordered from 24.4% at the 10th percentile, 20.8% at the median and 18.7% at the 90th percentile, respectively. We confirm these results in two ways. First, our analysis using restricted access census block data finds comparable results that cleanup leads to a 14.7% appreciation in the median block-level housing values. Second, our analysis of proprietary housing transactions data show that cheaper houses within a census tract are indeed more likely to be closer to a hazardous waste site, explaining the greater impacts they receive from the cleanup process. (C) 2012 Elsevier Inc. All rights reserved.