Adam Theising
Published: 2021
Total Pages: 0
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This dissertation studies household valuation of several environmental and urban amenities. These findings meet the ongoing policy need for accurate measurement of household marginal willingness to pay for environmental quality in cost-benefit analysis. In the first chapter, I study real estate markets during a city-wide lead service line replacement program that occurred in Madison, WI from 2000 to 2015. This program was the first of its kind nationally, and its design and rollout present an interesting natural experiment. Using a hedonic framework and several quasi-experimental empirical techniques, I identify an average post-service-line-replacement price effect on the order of 3-4% of a property's value. This implies a more than 75% average return on public and private remediation costs, suggesting homeowners strongly value the benefits of lead reduction in publicly supplied drinking water. In the second chapter, I study how information shocks about leaded aviation gasoline affect housing prices at nearly 1,300 US airports. Local markets pay little attention to relevant changes in federal policy, updates to local monitoring standards, or written disclosure of nearby potential risk. Price do respond to violations of federal air quality standards. I tie these results to environmental justice literature by framing airport-generated lead as "hidden pollution" resulting from a salient correlated disamenity: noise. Nearby neighborhoods downwind of airports are poorer, less educated, and more likely to be of a minority race/ethnicity, perhaps due to sorting on noise. Results also suggest demographic re-sorting occurred following the violations. In the third chapter, I revisit the classic spatial equilibrium paradigm of Roback and Rosen. I explore whether migration flows across US cities provide rich enough variation for credible environmental WTP estimates using only a single temporal snapshot of US households' location decisions. I argue that unobserved migration costs may be differentially tied to specific places and show evidence that cities in less amenity-rich places often have low rates of population "churn". Results from my household-level structural model suggests that ignoring place-based migration costs may bias estimates of average marginal willingness to pay for environmental amenities.
