Does hazardous waste matter? : evidence from the housing market and the Superfund Program

2005·3.2 MB·English

by  Greenstone, Michael, 1968-

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Massachusetts Institute of Technology
Department of Economics
Working Paper Series
DOES HAZARDOUS WASTE MATTER?
EVIDENCE FROM THE HOUSING MARKET AND THE
SUPERFUND PROGRAM
Michael Greenstone
Justin Gallagher
Working Paper 05-27
October 31, 2005
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This paper can be downloaded without charge from the
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Does Hazardous Waste Matter?
Evidence from the Housing Market and the Superfund Program*
Michael Greenstone and Justin Gallagher
October 2005
* We thank Daron Acemoglu, David Autor, Maureen Cropper, Esther Duflo, Dick Eckhaus, Alex Farreli,
Don Fullerton, Ted Gayer, Jon Gruber, Jon Guryan, Joe Gyourko, Paul Joskow, Matthew Kahn. David
Lee, Jim Poterba, Katherine Probst, Bernard Saianie, Randall Walsh, Rob Williams, and especially Ted
Gayer for insightful comments. The paper also benefited from the comments ofseminar participants at
ASSA, BYU, UC-Berkeley, UC-Davis. UC-Santa Barbara, CEMFI, Colorado, Columbia, HEC Montreal.
Kentucky, LSE, MIT, NBER, Rand, Resources for the Future, SITE, Stanford, Syracuse, Texas, and
UCLA. Leila Agha, Brian Goodness, Elizabeth Greenwood, Rose Kontak, William Li, and Jonathan
Ursprung provided outstanding research assistance. We especially thank Katherine Probst for generously
sharing data on the costs ofSuperfund clean-ups. Funding from the Center for Integrating Statistical and
Environmental Science at the University ofChicago and the Center for Energy and Environmental Policy
Research at MIT is gratefully acknowledged.

Does Hazardous Waste Matter?
Evidence from the Housing Market and the Superfund Program
Abstract
Approximately $30 billion (2000$) has been spent on Superfund clean-ups ofhazardous waste sites, and
remediation efforts are incomplete at roughly halfofthe 1,500 Superfund sites. This study estimates the
effect ofSuperfund clean-ups on local housing price appreciation. We compare housing price growth in
the areas surrounding the first 400 hazardous waste sites to be cleaned up through the Superfiind program
to the areas surrounding the 290 sites that narrowly missed qualifying for these clean-ups. We cannot
reject that the clean-ups had no effect on local housing price growth, nearly two decades after these sites
became eligible for them. This finding is robust to a series of specification checks, including the
application ofa quasi-experimental regression discontinuity design based on knowledge ofthe selection
rule. Overall, the preferred estimates suggest that the benefits of Superfund clean-ups as measured
through the housing market are substantially lower than the $43 million mean cost of Superfund clean-
ups.
Michael Greenstone Justin Gallagher
MIT, Department ofEconomics DepartmentofEconomics
MC
50 Memorial Drive, E52-359 549 Evans Hall, 3880
Cambridge, MA 02142-1347 UC Berkeley
andNBER ' Berkeley, CA 94720-3880
[email protected] [email protected]