Information Disclosure Requirements and the Effect of Soil Contamination on Property Values

This paper extends previous research assessing the effects of environmental pollution on property values, and the specific issue of information disclosure requirements on future real estate transactions. Given that various information disclosure requirements were imposed in most US states during the 1990s, it is important to begin to understand their anticipated effects. Using a case of soil contamination in Corpus Christi, TX, USA, this paper applies the contingent valuation method using telephone survey data to investigate the effect of a split-sample information disclosure treatment concerning soil contamination on the willingness to pay of potential home buyers. The authors apply a mixture modelling approach to better explain the effect of the information disclosure requirement.