Natural Gas Pipelines and the Value of Nearby Homes: A Spatial Analysis

Abstract

Abstract We examine the effect of a natural gas pipeline on the sales prices of nearby homes in Hillsborough County, Florida. We use an ordinary least squares regression model in the hedonic format to regress the natural logarithm of sale price on a vector of housing, neighborhood, transactional, and environmental characteristics. We apply spatial autocorrelation using two spatially autoregressive modeling techniques: the spatial lag model and the spatial error model. The results yield statistically insignificant coefficients for each distance band, which indicates that it is highly unlikely that there is an association between the sale price of a home and its proximity to a natural gas pipeline.