The effect of remediating PCB-contaminated sediments on home prices in Milwaukee, Wisconsin, USA

Abstract This paper estimates the effect of environmental remediation on housing prices in the Milwaukee Estuary Area of Concern (AOC) using a hedonic analysis of individual arms-length sales before and after a major remediation action between 2011 and 2015. Our design leverages this before-after comparison as well as the proximity of homes to remediation and the AOC boundary. Measuring the effect of AOCs in the housing market has always been a difficult task, given that water in AOCs can provide a mix of amenities and disamenities. Indeed, we find little evidence of a negative proximity effect when applying hedonic analysis to cross-section data. However, when we apply the analysis to a repeated cross section in a quasi-experimental framework, we find statistically significant evidence that living near the affected part of the AOC became more desirable after cleanup.