The External Effects of Power Generation on Local Housing Markets

We study the external effects of conventional and green electric power generation on home prices, comparing coal, gas, biomass and wind power production plants. We combine information on all wind turbines and power plants in the Netherlands with 2.5 million housing transactions to measure these external effects, covering a period of 29 years. Using a standard hedonic approach with a broad set of control variables, we find that dwellings located within 2 kilometers of wind turbines and power plants sell for 4.2% and 5.1% less than those in the control group, respectively. We also find that the effects disappear for distances above 2 and 3 kilometers, respectively. Of the different power plant categories, coal plants have the largest negative effect.