House price impacts of social and environmental (dis)amenities
House prices are a very useful tool for estimating the economic value of a particular social or environmental impact. By controlling variations in house quality and size it is possible to identify the effect proximity to a particular phenomenon has on house value, revealing people’s willingness to pay to avoid or access that phenomenon. We were particularly interested in estimating the house price impact of crime and education, but we also explored the house price effect of environmental factors such as pollution, wind turbines and energy efficiency.
Related to this work was a study that AQMeN researchers Gwilym Pryce, Stephan Heblich, Dan Olner, Chris Timmins, Ellie Bates and Timothy Birabi co-produced with the Scottish Government Climate XChange project, looking at the impact of wind turbines on house prices in Scotland.
The study includes data for the whole of mainland Scotland for the time period 1990-2014, and looks at the impact of both single turbines and whole wind farms. The analysis was conducted on postcode averages and using methods that follow individual dwellings over time, as well as the effects of properties having a view of the turbine(s) compared to proximity alone. Natural landscape and built environment have been taken into account when estimating whether an individual dwelling can see a wind farm or individual wind turbine.
The findings do not point to a consistent pattern of impact, and, in particular, there are no consistent negative effects on house price growth from being situated near to a wind farm. This lack of a consistent pattern is likely due to the range of factors that affect house prices simultaneously, and to varying degrees in different locations.
You can read the report, which was published in October 2016, in full here.
Professor Gwilym Pryce also wrote a piece for The Conversation about the findings from this research. Read Gwilym’s article – Why do wind farms drag down house prices in some places but not in others? – published in October 2016.
Image c/o Flickr/Images_of_Money