Something in the Water? Testing for Groundwater Quality Information in the Housing Market
I test the level of information regarding possible groundwater contamination in the residential real estate market in Washington County, Minnesota. An approximately seven square-mile trichloroethylene plume has affected hundreds of households’ water supplies since at least 1988 in the region. I find that homeowners were initially well-informed by market forces, but were later somewhat misinformed by government actions regarding the potential of water contamination from the plume. A disclosure law passed in 2003 may have added new, low-cost, and imperfect information to the market that could explain the change in informational awareness.
McLaughlin, Patrick A., Something in the Water? Testing for Groundwater Quality Information in the Housing Market, Journal of Agricultural and Resource Economics, Volume 36, Issue 2, August 2011, Pages 375-394
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