Study: Fracking decreases values for homes that use wells, increases values for homes that use piped water

Hydraulic fracturing causes values to decline for homes in neighborhoods that use well water, while it causes values to rise for homes in areas that rely on tap water, says a study by Duke University published in American Economic Review, Alison Jones reports for Duke Today. "The study, conducted in Pennsylvania, found that in areas using well water, home prices dropped by an average of $30,1676 when shale drilling occurred within a distance of 1.5 kilometers. Meanwhile, homes using piped water gained an average of $4,800 in value after shale wells opened nearby." (Duke graphic)

Researchers examined home sales in 36 Pennsylvania counties between 1995 and 2012, Jones writes. The study found that "among homes that rely on well water, a shale well located within one kilometer was associated with a 13.9 percent average decrease in home values. But if the nearest shale gas drilling site was at least two kilometers away, property values remained constant. In neighborhoods with a piped water supply, meanwhile, home values rose slightly after shale wells opened, perhaps due to royalty payments by shale gas companies."

Lead author Christopher Timmins, a Duke economics professor, said: "Our results show clearly that housing markets are responding to homeowners’ concerns about groundwater contamination from shale gas development. We may not know for many years whether these concerns are valid or not. However, they are creating a real cost to property owners today.” (Read more)