The Housing Market Impacts of Shale Gas Development

Abstract

Using data from New York and Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from shale gas development that vary with geographic scale and water source. Results indicate large negative impacts on nearby groundwater-dependent homes, while piped water-dependent homes are positively impacted by proximity (although by a smaller amount), suggesting an impact of lease payments. At a broader geographic scale, we find evidence that new well bores can increase property values, but these effects diminish over time. Undrilled permits, conversely, may cause property values to decrease. JEL Classification Numbers: Q53 Keywords: shale gas, groundwater, property values, hedonic models, nearest neighbor matching, differences-in-differences, triple differences