The Impact of Wind Power Projects on Residential Property Values ...

Using different statistical methods, Poletti (2005; 2007) used a t-Test to investigate Nuisance and
Area Stigma by comparing the mean sales prices <strong>of</strong> 187 and 256 homes in Illinois and Wisconsin,
14, 15
respectively, located near wind facilities (target group) to those further away (control group).
He split these target and control groups into respective smaller and more-homogenous subgroups,
such as large and small tracts, with and without homes, finding no statistical evidence
that homes near the wind facilities sold for different prices than those farther away. Sterzinger et
al. (2003) analyzed roughly 24,000 residential transactions, which were divided between those
within five miles <strong>of</strong> a wind facility and those outside <strong>of</strong> five miles in an effort to assess Area
Stigma. <strong>The</strong>y compared residential appreciation rates over time, and found no apparent
difference between those homes within and outside <strong>of</strong> five miles from a wind facility, but the
statistical significance <strong>of</strong> this comparison was not reported.
Other authors have used smaller samples <strong>of</strong> residential transactions and a variety <strong>of</strong> simple
statistical techniques, without reporting statistical significance, and have found a lack <strong>of</strong>
evidence <strong>of</strong> effects from Nuisance Stigma (Jerabek, 2001; Jerabek, 2002; Beck, 2004) and Area
Stigma (DeLacy, 2005; Goldman, 2006). <strong>The</strong>se results, however, are somewhat contrary to what
one appraiser has found. In his investigation <strong>of</strong> Nuisance Stigma around a wind facility in Lee
County, IL, McCann (2008) found that two homes nearby a wind facility had lengthy selling
periods that, he believes, also adversely affected transaction prices. Additionally, Kielisch
(2009) investigated Nuisance Stigma by comparing twelve transactions <strong>of</strong> undeveloped land near
two wind facilities in Wisconsin (Blue Sky Green Field and Forward) to undeveloped land
transactions farther away. He found that land tracts near the wind facilities sold for dramatically
lower prices ($/acre) than the comparable group, but the statistical significance <strong>of</strong> the
comparison was not reported.
In addition to these revealed preference studies, a number <strong>of</strong> stated preference surveys (e.g.,
contingent valuation) and general opinion surveys have investigated the existence <strong>of</strong> potential
effects. 16 A survey <strong>of</strong> local residents, conducted after the wind facilities were erected, found no
evidence <strong>of</strong> Area Stigma (Goldman, 2006), while another found limited evidence <strong>of</strong> these
stigmas (Bond, 2008). 17 Similarly, some surveys <strong>of</strong> real estate experts conducted after facility
14 A t-Test is used to compare two sample means by discerning if one is significantly different from the other.
15 <strong>The</strong> 2007 study used the data contained in the 2005 study in combination with new data consisting <strong>of</strong> transactions
that occurred in the interim period.
16 Contingent valuation is a survey based technique to value non-market goods (e.g., an environmental disamenity)
that asks respondents what their “willingness to pay” (or “willingness to accept”) is to have, for instance, a
disamenity removed from (or to have it remain in) their neighborhood. This technique is distinct from a general
opinion survey, which might ask whether respondents believe property values have been impacted by an
environmental disamenity and, if so, “by how much.” Although there are important distinctions between the two
techniques, with the contingent valuation method <strong>of</strong>ten preferred by economic practitioners, for simplicity no
distinction is made here between these two approaches. Finally, another subset <strong>of</strong> the survey literature focuses on
public acceptance (i.e., opinion). Though these public acceptance surveys sometimes cover possible impacts on
property values, those impacts are not quantified in economic terms. As a result, public acceptance survey results
are not reported here.
17 Bond (2008) asked respondents to declare if the wind facility, which is located roughly 7 miles away, would effect
what they would be willing to pay for their house and 75% said either they would pay the same or more for their
house, while the remainder would pay less. When those latter respondents were asked to estimate the percentage
difference in value, their estimates averaged roughly 5%.
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