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

P 1 is the adjusted sales price at the first sale (in 1996 dollars),
P 2 is the adjusted sales price at the second sale (in 1996 dollars),
t 1 is the date <strong>of</strong> the first sale,
t 2 is the date <strong>of</strong> the second sale, and
(t 1 – t 2 ) is determined by calculating the number <strong>of</strong> days that separate the sale dates and dividing
by 365.
As with the hedonic regression model, the usefulness <strong>of</strong> the repeat sales model is well
established in the literature when investigating possible disamenities. For example, a repeat
sales analysis was used to estimate spatial and temporal sales price effects from incinerators by
Kiel and McClain (1995), who found that appreciation rates, on average, are not sensitive to
distance from the facility during the construction phase but are during the operation phase.
Similarly, McCluskey and Rausser (2003) used a repeat sales model to investigate effects
surrounding a hazardous waste site. <strong>The</strong>y found that appreciation rates are not sensitive to the
home’s distance from the disamenity before that disamenity is identified by the EPA as
hazardous, but that home values are impacted by distance after the EPA’s identification is made.
6.2. Dataset
<strong>The</strong> 7,459 residential sales transactions in the dataset contain a total <strong>of</strong> 1,253 transactions that
involve homes that sold on more than one occasion (i.e., a “pair” <strong>of</strong> sales <strong>of</strong> the same home).
For the purposes <strong>of</strong> this analysis, however, the key sample consists <strong>of</strong> homes that sold once
before the announcement <strong>of</strong> the wind facility, and that subsequently sold again after the
construction <strong>of</strong> that facility. <strong>The</strong>refore any homes that sold twice in either the pre-announcement
or post-construction periods were not used in the repeat sales sample. 91 <strong>The</strong>se were excluded
because either they occurred before the effect would be present (for pre-announcement pairs) or
after (for post-announcement pairs). This left a total <strong>of</strong> 368 pairs for the analysis, which was
subsequently reduced to 354 usable pairs. 92
<strong>The</strong> mean AAR for the sample is 1.0% per year, with a low <strong>of</strong> -10.5% and a high <strong>of</strong> 13.4%.
Table 27 summarizes some <strong>of</strong> the characteristics <strong>of</strong> the homes used in the repeat sales model.
<strong>The</strong> average house in the sample has 1,580 square feet <strong>of</strong> above-ground finished living area, sits
on a parcel <strong>of</strong> 0.67 acres, and originally sold for $70,483 (real 1996 dollars). When it sold a
second time, the average home in the sample was located 2.96 miles from the nearest wind
turbine (14 homes were within one mile, 199 between one and three miles, 116 between three
and five miles, and 25 outside <strong>of</strong> five miles). Of the 354 homes, 14% (n = 49) had some view <strong>of</strong>
the facility (35 were rated MINOR, five MODERATE, and nine either SUBSTANTIAL or
EXTREME). Because <strong>of</strong> the restriction to those homes that experienced repeat sales, the sample
is relatively small for those homes in close proximity to and with dramatic views <strong>of</strong> wind
facilities.
91 752 pairs occurred after construction began, whereas 133 pairs occurred before announcement.
92 Of the 368 pairs, 14 were found to have an AAR that was either significantly above or below the mean for the
sample (mean +/- 2 standard deviations). <strong>The</strong>se pairs were considered highly likely to be associated with homes that
were either renovated or left to deteriorate between sales, and therefore were removed from the repeat sales model
dataset. Only two <strong>of</strong> these 14 homes had views <strong>of</strong> the wind turbines, both <strong>of</strong> which were MINOR. All 14 <strong>of</strong> the
homes were situated either between one and three miles from the nearest turbine (n = 8) or between three and five
miles away (n = 6).
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