Abstract
Shale energy development activity may benefit some aspects of a regional economy (such as increased jobs or tax revenue); however, there may also be negative impacts to the local environment, such as noise and underground water contamination. We study the impact of unconventional drilling activity on housing price in an area of the country with a long history of crude oil production. A prospective home buyer may want to avoid a place near sites that have been drilled using unconventional drill technologies such as horizontal fracturing. Adopting a hedonic price model, we estimate the impact of distance to and density of unconventional drilling on housing prices in two central counties in Oklahoma during the period 2001–2016. We also apply a semiparametric approach to deal with the possibility that the relationship between an environmental pollutant source and housing price is nonlinear. The empirical results are consistent in terms of physical housing characteristics and locational aspects in all cases, with drilling activity having only a minimal effect in benchmark models. Further, the semiparametric estimation results support the findings that drilling activity has only limited impacts on local housing prices.
Highlights
A prospective home buyer may want to avoid a place near sites that have been drilled using unconventional drill technologies such as horizontal fracturing
Most of this previous literature focuses on the shale gas drilling impact on house prices in Pennsylvania, and one study examined the same effect in Texas
We examined the existence of externalities from unconventional drilling on housing prices in two central Oklahoma counties
Summary
A prospective home buyer may want to avoid a place near sites that have been drilled using unconventional drill technologies such as horizontal fracturing. Several studies have examined negative externalities associated with the drilling increase, such as exacerbated educational attainment or declines in well-being in regions with high levels of drilling activity [8,9] This issue is of importance to the local housing market. Prospective home buyers may choose to avoid options near sites that have been drilled using unconventional technologies If this is the case, this preference should reveal itself in the house price. At least, four papers [11,12,14,15] have examined this negative externality from energy development using a hedonic analysis Most of this previous literature focuses on the shale gas drilling impact on house prices in Pennsylvania, and one study examined the same effect in Texas. Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
