RT Journal Article
SR Electronic
T1 Housing Market Capitalization of Pipeline Risk
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 040220-0047R1
DO 10.3368/le.100.4.040220-0047R1
A1 Herrnstadt, Evan
A1 Sweeney, Richard L.
YR 2024
UL http://le.uwpress.org/content/early/2024/04/15/le.100.4.040220-0047R1.abstract
AB We study how house prices responded to a deadly 2010 pipeline explosion in San Bruno, CA, which shocked both attention and information. We find that home prices near pipelines in the Bay Area declined by 2% initially, but this gap quickly dissipated. We see no response among properties similarly exposed in other markets, nor in response to an informational letter sent to households the following year. These results suggest that homebuyers are willing to pay to avoid pipeline risk when the issue has their attention, but that this attention is hard to capture and fleeting.