Prior studies of environmental contamination examine the cross-sectional impacts, either through a sales-comparison-type model or hedonic pricing. Neither model is robust at analyzing the impact of an event, such as a contamination announcement. Longer term longitudinal studies may not control for exogenous impacts, such as changes in house quality. This study uses a repeat-sales index to extract value-trend changes immediately after a contamination announcement, thus isolating the impacts of the event itself and controlling for exogenous factors. While the study is focused on contamination, it is generalizable to any systemic event.
Author: John A. Kilpatrick
Originally published in the Journal of Housing Research, Vol. 15, No. 2 (2006)