The Effect of HVTLs on Property Values: An Event Study
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Charles Thomas, Gerd Welke
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International Real Estate Review
We present empirical results for the effect on residential property values from the construction of high voltage transmission towers on an existing utility right of way. The event window consists of a period of two and a half years during which non-operational 500 kV towers were in place, after which they were taken down. When comparing the proximate transactions within the window to those outside, relative to the same difference for distant transactions, we find a negative effect on valuation during the presence of the towers, which is most signficant for encumbered and abutting properties, and vanishes quickly with distance from the right of way or nearest tower. An event window that corresponds to widespread public knowledge of the pending construction leads to an insignficant effect, which suggests that the price formation process is possibly ineffcient.
Hedonic Pricing, High Voltage Transmission Lines, Event Study, Market Efficiency