2005-01 EC: The Impact of Oil and Natural Gas Facilities on Rural Residential Property (working paper)
Peter C. Boxall, Wing H. Chan, and Melville L. McMillan
published: 2005 | Research publication | Working paper - Economics
This paper examines the impact of oil and gas facilities on rural residential property
values using data from central Alberta, Canada. The influences are evaluated using two
groups of variables characterizing hazard effects and amenity effects. A spatial error
model was employed to capture the spatial dependence between neighbouring properties.
The results show that property values are negatively correlated with the number of sour
gas wells and flaring oil batteries within 4km of the property. Indices reflecting potential
health hazards associated with rates of H2 S release (based on information from
Emergency Response Plans and Zones) also have a significant negative association with
property prices. The findings suggest that oil and sour gas facilities located within 4 km
of rural residential properties significantly affect their sale price.
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revised May 24/05