Do Superfund Sites Affect Local Property Values? Evidence from a Spatial Hedonic Approach

The presence of Superfund sites can have substantial impacts on surrounding property values. A shortcoming of studies utilizing the traditional hedonic price model is that they fail to account for the presence of spatial dependence or autocorrelation in residential housing. Jefferson County, Kentucky is home to Louisville, the largest city in the state. Seven different Superfund sites are located within or just outside the county border. Community planners, appraisal professionals, or policy makers considering the use of a traditional hedonic pricing model will find inefficient estimates compared to a spatial error hedonic model. This study also considers two different phases of the cleanup process, suggesting that median housing value is lower for houses in close proximity to deleted Superfund sites, but is not significantly affected by sites classified as final. Another consideration is the implications of multiple Superfund sites located within five miles of the block group centroid. Findings indicate that multiple Superfund sites do not significantly impact housing values