Impacts of Hospital Closures on Rural Housing Values in Illinois

Abstract

Rural hospitals may be an attractive amenity for retirees, retirement communities, and firms. In many rural communities, hospitals are often one of the largest employers. When a rural hospital closes, this is expected to reduce housing values, although no studies to date have investigated this relationship. As a pilot study for future research, we estimate the impact of White Community Medical Center’s (located in Carmi, Illinois) closure in December 2005 on local housing values, using a repeat sales estimator. We find that the change in housing values for houses that sold before and after the closure was not statistically significantly affected by the distance from the house to the closed hospital. These results are limited by a small number of repeat sales in White County; further research with data from other states is needed to determine the impact of rural hospital closures on housing values.