Working Paper: NBER ID: w31731
Authors: Michelle M. Marcus; Rosie Mueller
Abstract: Our understanding of individuals’ response to information about unregulated contaminants is limited. We leverage the highly publicized social discovery of unregulated PFAS (per- and polyfluoroalkyl substances) contamination in public drinking water to study the impact of information about unregulated contaminants on housing prices. Using residential property transaction data, we employ a difference-in-differences research design and show that high profile media coverage about PFAS contamination significantly decreased property values of affected homes. We also find suggestive evidence of residential sorting that may have worsened environmental inequality.
Keywords: PFAS; housing prices; unregulated contaminants; drinking water; environmental justice
JEL Codes: Q52; Q53; R21; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Media coverage about PFAS contamination (Q53) | Decrease in property values of affected homes in Paulsboro, NJ (H13) |
| Decrease in property values of affected homes in Paulsboro, NJ (H13) | Persistent public distrust and stigma associated with living in contaminated areas (H84) |
| Information shock about PFAS contamination (Q53) | Residential sorting post-discovery (R23) |
| Information shock about PFAS contamination (Q53) | Decline in households with children, increase in vacant homes, shifts in racial composition of mortgage applicants (R20) |