The impact of hydraulic fracturing on housing values in Weld County, Colorado: a hedonic analysis
Date
2013
Authors
Bennett, Ashley, author
Loomis, John B., advisor
Costanigro, Marco, committee member
Reich, Robin, committee member
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Abstract
Oil and gas production using hydraulic fracturing has rapidly spread across the US and moved into suburban and urban neighborhoods. Proximity to residential areas has generated significant concerns by homeowners about water pollution, air pollution, aesthetics, and hence property values. However, the increase in drilling activity has generated sizable gains in local employment and a subsequent increase in demand for housing. In spite of controversies, there is almost no research evaluating whether proximity and level of drilling activity affects house prices on net. We apply the hedonic property method to a sample of 4035 housing transactions between 2009 and 2012 in Weld County, Colorado, the county at the forefront of oil and gas drilling activity in the state. Results across both the semi-log OLS and semi-log spatial GLS model specifications are consistent. While the count of wells being hydraulically fractured within a half mile of a house has a negative effect on houses in Greeley and other towns, rural households are statistically unaffected by the density of hydraulic fracturing in their immediate area. Employment in the oil and gas sector has a positive and significant effect on house prices in the full county and Greeley model specifications, but not in the rural model specifications. The overall lack of negative effect of hydraulic fracturing on housing prices in Weld County may be a result of the increase in employment associated with drilling operations potentially offsetting some of the disamenity associated with oil and gas drilling.
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Subject
Weld County
hydraulic fracturing
housing values
hedonic method
drilling