Working Paper: NBER ID: w23858
Authors: Evan Herrnstadt; Richard L. Sweeney
Abstract: Stated safety concerns are a major impediment to making necessary expansions to the natural gas pipeline network. While revealed willingness to pay to avoid existing natural gas pipelines appears small, it is difficult to know if this reflects true ambivalence or a lack of salience and awareness. In this paper, we test this latter hypothesis by studying how house prices responded to a deadly 2010 pipeline explosion in San Bruno, CA, which shocked both attention and information. Using multiple identification strategies, we fail to find any evidence of a meaningful shift in the hedonic price gradient around pipelines following these events. We conclude with a discussion of how this result relates to latent, fully informed preferences, as well as the implications for future pipeline expansions.
Keywords: pipeline awareness; housing prices; natural gas; safety concerns
JEL Codes: Q48; Q51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| San Bruno pipeline explosion (L95) | hedonic price gradient (D11) |
| Increased awareness (F69) | willingness to pay to avoid living near pipelines (L95) |
| Informational letter (Y20) | house prices (R31) |