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

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Figure 8: Results from the Temporal Aspects Model 25% 20% Price Changes Over Time Average percentage difference in sales prices as compared to reference category AveragePercentageDifferences 15% 10% 5% 0% -5% -10% -15% ReferenceCategory Outside <strong>of</strong>5Miles MoreThan2Years BeforeAnnouncement Less Than 1 Mile Between 1 and 3 Miles -20% Between 3 and 5 Miles Outside 5 Miles -25% More Than 2 Years Before Announcement Less Than 2 Years Before Announcement After Announcement Before Construction Less Than 2 Years After Construction Between 2 and 4 Years After Construction More Than 4 Years After Construction <strong>The</strong> reference category consists <strong>of</strong> transactions <strong>of</strong> homes situated more than five miles from where the nearest turbine would eventually be located and that occurred more than two years before announcement <strong>of</strong> the facility To explore Nuisance Stigma further, the analysis again turns to the t-Test and compares the coefficients for transactions that occurred more than two years before wind facility announcement (during which time the future wind facility is not expected to have any impact on sales prices) to the estimates for the DISTANCE coefficients in the periods that follow. <strong>The</strong>se results are shown in Table 20. Focusing on those transactions inside <strong>of</strong> one mile, it is found that all coefficients are greater in magnitude than the reference category except during the postannouncement-pre-construction period (which is 1% less and is not statistically significant; p value 0.90), indicating, on average, that home values are increasing or staying stable from the pre-announcement reference period onward. <strong>The</strong>se increases, however, are not statistically significant except in the period <strong>of</strong> two to four years after construction (0.12, p value 0.08). With respect to Nuisance Stigma, the more important result is that, relative to homes that sold well before the wind facility was announced, no statistically significant adverse effect is found in any period within a one mile radius <strong>of</strong> the wind facility. <strong>The</strong>refore, the -5% (albeit not statistically significant) average difference that is found in the Base Model, and the -8% (statistically significant) result that is found in the All Sales Model (for homes between 3000 feet and one mile) appear to both be a reflection <strong>of</strong> depressed home prices that preceded the construction <strong>of</strong> the relevant wind facilities. If construction <strong>of</strong> the wind facilities were downwardly influencing the sales prices <strong>of</strong> these homes, as might be deduced from the Base or All Sales Models alone, a diminution in the inflation adjusted price would be seen as compared to pre-announcement levels. Instead, an increase is seen. As such, no persuasive evidence <strong>of</strong> a Nuisance Stigma is evident among this sample <strong>of</strong> transactions. 82 82 It should be noted that the numbers <strong>of</strong> study areas represented for homes situated inside <strong>of</strong> one mile but in the periods “more than two years before announcement” and “more than four years after construction” are fewer (n = 5) than in the other temporal categories (n = 8). Further, the “more than two years before announcement – inside <strong>of</strong> one mile” category is dominated by transactions from one study area (OKCC). For these reasons, there is less 46
Turning to the coefficient differences for distances greater than one mile in Table 20, again, no statistical evidence <strong>of</strong> significant adverse impacts on home values is uncovered. Where statistically significant differences are identified, the coefficients are greater than the reference category. <strong>The</strong>se findings corroborate the earlier Area Stigma results, and re-affirm the lack <strong>of</strong> evidence for such an effect among the sample <strong>of</strong> residential transactions included in this analysis. Table 20: Results from Equality Test <strong>of</strong> Temporal Aspects Model Coefficients More Than 2 Years Before Announcement Less Than 2 Years Before Announcement After Announcement Before Construction Less Than 2 Years After Construction Between 2 and 4 Years After Construction More Than 4 Years After Construction Less Than 1 Mile Reference 0.03 (0.45) -0.01 (-0.13) 0.04 (0.56) 0.12 (1.74)* 0.06 (0.88) Between 1 and 3 Miles Reference 0.04 (1.92)* 0.02 (0.86) 0.05 (2.47)** 0.05 (2.27)** 0.04 (1.82)* Between 3 and 5 Miles Reference 0.01 (0.37) 0.01 (0.34) 0.02 (0.77) 0.02 (0.78) 0.02 (0.79) Outside <strong>of</strong> 5 Miles † Reference -0.04 (-0.86) -0.03 (-0.91) -0.03 (-0.77) 0.03 (0.81) 0.01 (0.36) Numbers in parenthesis are t-Test statistics. Significance = *** 1% level, ** 5% level, * 10% level, below the 10% level. † For homes outside <strong>of</strong> 5 miles, the coefficient differences are equal to the coefficients in the Temporal Aspects Model, and therefore the t- values were produced via the OLS. 5.5. Orientation Model All <strong>of</strong> the hedonic models presented to this point use a VIEW variable that effectively assumes that the impact <strong>of</strong> a view <strong>of</strong> wind turbines on property values will not vary based on the orientation <strong>of</strong> the home to that view; the impact will be the same whether the view is seen from the side <strong>of</strong> the home or from the back or front. Other literature, however, has found that the impact <strong>of</strong> wind projects on property values may be orientation-dependent (Sims et al., 2008). To investigate this possibility further a parameter for orientation is included in the model. 5.5.1. Dataset and Model Form <strong>The</strong> same dataset is used as in the Base Model, focusing on post-construction transactions (n = 4,937). To investigate whether the orientation <strong>of</strong> a home to the turbines (ORIENTATION) has a marginal impact on residential property values, over and above that <strong>of</strong> the VIEW impacts alone, the following hedonic model is estimated: 83 confidence in these two estimates (-13% and -7% respectively) than for the estimates for other temporal periods inside <strong>of</strong> one mile. Based on additional sensitivity analysis not included here, it is believed that if they are biased, both <strong>of</strong> these estimates are likely biased downward. Further, as discussed in footnote 47 on page 19, there is a potential for bias in the “announcement” date in that awareness <strong>of</strong> a project may precede the date that a project enters the public record (i.e., the “announcement” date used for this analysis). Taken together, these two issues might imply that the curve shown in Figure 8 for “less than one mile” transactions, instead <strong>of</strong> having a flat and then increasing shape, may have a more <strong>of</strong> an inverse parabolic (e.g., “U”) shape. This would imply that a relative minimum in sales prices is reached in the period after awareness began <strong>of</strong> the facility but before construction commenced, and then, following construction, prices recovered to levels similar to those prior to announcement (and awareness). <strong>The</strong>se results would be consistent with previous studies (e.g., Wolsink, 1989; Devine-Wright, 2004) but cannot be confirmed without the presence <strong>of</strong> more data. Further research on this issue is warranted. In either case, such results would not change the conclusion here <strong>of</strong> an absence <strong>of</strong> evidence <strong>of</strong> a pervasive Nuisance Stigma in the post-construction period. 83 <strong>The</strong> various possible orientations <strong>of</strong> the home to the view <strong>of</strong> turbines will be, individually and collectively, referred to as “ORIENTATION” in this report. 47
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LBNL-2829E ERNEST ORLANDO LAWRENCE
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LBNL-2829E The <st
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Table of Contents
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List of Tables Tab
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Acknowledgements The</stron
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This report builds on the previous
Page 13 and 14: Table ES-2: Impact
Page 15 and 16: Figure ES-3: Base Model Results: Sc
Page 17 and 18: In the Distance Stability Model, fo
Page 19 and 20: 1. Introduction Wind</stron
Page 21 and 22: model 7 and uses various forms <str
Page 23 and 24: A particularly useful application <
Page 25 and 26: Using different statistical methods
Page 27 and 28: Table 1: Summary of</strong
Page 29 and 30: By using a variety of</stro
Page 31 and 32: minimum of 164 fee
Page 33 and 34: 3.2.2. GIS Data GIS data on parcel
Page 35 and 36: In addition to the qualitative VIEW
Page 37 and 38: with the rest of t
Page 39 and 40: Figure 4: Frequency of</str
Page 41 and 42: 4. Base Hedonic Model This section
Page 43 and 44: impose the least structure on the u
Page 45 and 46: of the home, home
Page 47 and 48: etween the reference study area (WA
Page 49 and 50: Figure 7: Results from the Base Mod
Page 51 and 52: 5. Alternative Hedonic Models <stro
Page 53 and 54: concentrated inside of</str
Page 55 and 56: all other components are as defined
Page 57 and 58: the distance from them might not oc
Page 59 and 60: explanation is that the additional
Page 61 and 62: 6) More than four years after const
Page 63: Table 19: Results from Temporal Asp
Page 67 and 68: Table 21: Frequency Crosstab <stron
Page 69 and 70: 5.6.1. Dataset and Model Form Data
Page 71 and 72: with the scenic vista. In other wor
Page 73 and 74: 6. Repeat Sales Analysis In general
Page 75 and 76: Table 27: List of
Page 77 and 78: adjustment, and represent another t
Page 79 and 80: that are located within one mile <s
Page 81 and 82: 7. Sales Volume Analysis Th
Page 83 and 84: Figure 11: Sales Volumes by PERIOD
Page 85 and 86: three years before announcement), a
Page 87 and 88: 8. Wind Pr
Page 89 and 90: Drawing from the previous literatur
Page 91 and 92: Taken together, the results from al
Page 93 and 94: 9. Conclusions Though surveys gener
Page 95 and 96: Davis, L. W. (2008) The</st
Page 97 and 98: LeSage, J. P. (1999) The</s
Page 99 and 100: Watson, M. (2005) Estimation <stron
Page 101 and 102: Figure A - 1: Map of</stron
Page 103 and 104: all very small communities with lit
Page 105 and 106: A.2 TXHC Study Area: Howard County
Page 107 and 108: Census Statistics Name Type 2007 Po
Page 109 and 110: Data Collection and Summary County
Page 111 and 112: A.4 IABV Study Area: Buena Vista Co
Page 113 and 114: Variables of Inter
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facilities than the towns o
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A.6 WIKCDC Study Area: Kewaunee and
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Variables of Inter
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elatively high elevations o
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A.8 PAWC Study Area: Wayne County (
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Census Statistics Name Type 2007 Po
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ural landscapes, with the largest p
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A.10 NYMC Study Area: Madison Count
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Variables of Inter
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account, combined with the determin
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Appendix C: Field Data Collection I
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Figure A - 14: Field Data Collectio
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ABOVE AVERAGE VISTA PREMIUM VISTA 1
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EXTREME VIEW 6 turbines visible fro
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5 is a vector of d
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values, that effect seems likely to
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unrestricted Home and Site Characte
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with coefficients above zero and th
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Figure A - 15: Histogram of
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The M Distance his
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sold within the preceding six month
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Appendix H: Alternative Models: Ful
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Table A - 8: Full Results for the C
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Table A - 10: Full Results for the
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Table A - 11: Full Results for the
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