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A Spatial Hedonic Approach to Assess the Impact of Swine Production on Residential Property Values

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Abstract

A spatial hedonic model is developed to assess monetary harm of confined animal feeding operations (CAFOs) on property values, taking explicitly into account spatial dependence in property values. Spatial autocorrelation was found in the form of spatial lag dependence, not spatial error dependence. When spatial lag dependence is explicitly taken into account, on average the impact coefficient estimate of a CAFO is reduced by 18%. For example, the impact on the value of the median house ($63,520) 1 mile from a swine facility with 10,000 head fell from  − $6,800 to  − $5,200, or 23.5%. The magnitude of the spatial autoregressive parameter was about 0.2 for the 1-mile distance band, meaning one-fifth of the house value could be explained by the values of the neighboring houses.

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Authors and Affiliations

  1. Urban Regeneration Research Team, Korean Land Corporation, Seoul, South Korea

    Jungik Kim

  2. Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Urbana, IL, USA

    Peter Goldsmith

  3. National Soybean Research Laboratory, Urbana, IL, USA

    Peter Goldsmith

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  1. Jungik Kim
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  2. Peter Goldsmith
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Correspondence to Peter Goldsmith.

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Kim, J., Goldsmith, P. A Spatial Hedonic Approach to Assess the Impact of Swine Production on Residential Property Values. Environ Resource Econ 42, 509–534 (2009). https://doi.org/10.1007/s10640-008-9221-0

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  • DOI: https://doi.org/10.1007/s10640-008-9221-0

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