Shale Gas Development and Property Values: Differences Across Drinking Water Sources

Journal Article (Working Paper)

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.

Full Text

Duke Authors

Cited Authors

  • Muehlenbachs, L; Spiller, E; Timmins, CD

Published Date

  • September 1, 2012

Published In

  • Economic Research Initiatives at Duke (Erid) Working Paper