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Impacts of Ground Water Contamination on Property Values: Agricultural Run-off and Private Wells

  • Dennis Guignet, Patrick J. Walsh and Rachel Northcutt
Abstract

Few studies have examined the impacts of ground water quality on residential property values. Using a unique data set of well tests, we link residential real estate transactions to home-specific contamination and conduct a hedonic analysis of sales in Lake County, Florida, where pollution concerns relate primarily to agricultural run-off. We find that recent testing and contamination of ground water there correspond to a 2–6 percent depreciation in home values, an effect that diminishes over time. Focusing on nitrogen-based contamination, we find that prices decline mainly when concentrations exceed the regulatory health standard, suggesting as much as a 15 percent depreciation at levels twice the standard.

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Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Corresponding author
Correspondence: Dennis Guignet ■ National Center for Environmental EconomicsU.S. Environmental Protection AgencyMail Code 1809 T1200 Pennsylvania Avenue, NWWashington, DC 20460 ■ Phone 01.202.566.1573 ■ Email guignet.dennis@epa.gov.
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Agricultural and Resource Economics Review
  • ISSN: 1068-2805
  • EISSN: 2372-2614
  • URL: /core/journals/agricultural-and-resource-economics-review
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