Shale gas, groundwater and real estate values

Here’s a counter-intuitive result from┬áLucija Muehlenbachs and colleagues about the effect of shale gas drilling on neighborhood property values:

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes…. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.

 

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