ABSTRACT
This paper uses quantile regression to examine the impact of land subsidence and earth fissures on residential property values across different quantiles of distribution in housing prices in Maricopa County, Arizona. Using 82,716 arms-length property sales between 2004 and 2010, we estimated a fixed effects quantile regression model predicting the impact of land subsidence and earth fissures on property values. We found that both land subsidence and earth fissures had a negative impact on property values. The impact of land subsidence and earth fissures vary statistically across different distributions of housing prices. Disamenity impacts are found to be more pronounced at high-priced homes while they are statistically insignificant at substantially lower priced homes.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 The estimated coefficients on city dummy variables from OLS and quantile regression models are available upon request from the authors.
2 To calculate aggregate loss in property values, we used 2010 Census data to identify the number of housing units (289,884) in land subsidence feature, but outside 500 meters buffer of earth fissures, and those (8211) within both land subsidence features and earth fissure buffers. Then, total loss from the OLS model was computed by taking the weighted average of the number of housing units in each zone, and the mean reduction in housing prices () in corresponding zone. The total loss in property values from the quantile regression model was computed, following the procedure of calculating the net benefit estimation introduced in Mueller and Loomis (Citation2014).