Coal-to-gas fuel switching and its effects on housing prices.

Peer Reviewed
31 January 2022

Energy Economics

Nathaly M. Rivera, Scott Loveridge

Abstract

We derive causal property value impacts of the coal-to-gas fuel switching conversion implemented by several power plants in the United States. We use an extensive dataset of property transactions around the country and adopt several spatial difference-in-difference approaches that use records of residential property transactions of homes with pollution exposure and proximity to the fuel-switching plants before and after the switch. The use of homes near coal-fired plants that did not innovate strengthens these estimations. The results suggest that the shutdown of coal-fired generators increased property values by roughly 12%–20% within 1 mile of distance from fuel-switching stations. These effects significantly increase once we consider wind exposure of homes around these plants, which brings to light the strong and localized disamenity effect of coal-fired power stations. Conservative back-of-the-envelope calculations suggest that the fuel-switching led to a $70-million increase in property values around the country.

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Rivera, N. M., & Loveridge, S. (2022). Coal-to-gas fuel switching and its effects on housing prices. Energy Economics, 106, 105733. https://doi.org/10.1016/j.eneco.2021.105733
Publication | 24 August 2022