Clean Electricity, Dirty Electricity: The Effect on Local House Prices

P. Eichholtz, N. Kok, M. Langen*, D. van Vulpen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Renewable energy production is one of the most important policy instruments to fight climate change. However, despite global benefits, renewable energy production entails some local challenges, such as requiring more space per unit production capacity. In this paper, we study the external effects of large-scale conventional and renewable electric power generation facilities on local house prices. We combine information of all coal, gas, and biomass plants, as well as all wind turbines in the Netherlands, with 1.5 million housing transactions over a period of 30 years. Using a difference-in-difference as well as a repeated sales model, we study the effects of facility openings and closings. Our results show negative external price effects for gas plants and wind turbines, but positive effects for biomass plants, conditionally upon ex-ante lower priced locations. The external effects of power generating facilities on local housing markets are important to consider, especially with the current focus of public policies on the expansion of renewable energy generation. Our paper is one of the first to present a large-scale study, using detailed information, and comparing several different energy sources in one framework.
Original languageEnglish
Number of pages35
JournalJournal of Real Estate Finance and Economics
DOIs
Publication statusE-pub ahead of print - 10 Dec 2021

Keywords

  • Renewable energy
  • Wind power
  • Coal plants
  • Housing markets
  • Residential real estate
  • WIND POWER IMPLEMENTATION
  • RENEWABLE ENERGY
  • NEGATIVE EXTERNALITIES
  • PUBLIC-ATTITUDES
  • PROPERTY-VALUES
  • IMPACT
  • LANDSCAPES
  • TURBINES
  • ANNOYANCE
  • PLANTS

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