Title

Stigmatized property values: A tale of two neighborhoods

Document Type

Conference Proceeding

Abstract

McCluskey and Rausser (2003) examined environmental and neighborhood stigma effects for both the short term and long term, respectively within a traditional multiple-equilibrium hedonic model. They show how alternative measures of short term stigma using distance change over time using alternative measures for distance but do not use a spatial econometrics method. Recent developments in geostatistical approaches by Basu and Thibodeau (1999) and Neill, Hassenzahl and Assane (2007) provide opportunities to reexamine these stigma effects and compare predictive power of alternative models as well as coefficients of neighborhood and distance over time. This paper analyzes the impact of the long run environmental contamination and the short run transient PEPCON explosion on property values in two nearby Henderson (NV) neighborhoods, Green Valley (zip codes 89014 and 89074) and zip code 89015. Our results are consistent with predictions of conventional hedonic models while the spatial econometric methods outperform the traditional. The results further suggest absence of long-run or short run effects of stigma on property values in Green Valley but persistence of stigma effect on property values in the less fortunate zip code 89015.

Disciplines

Business | Environmental Sciences | Real Estate

Permissions

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