Home • PRRES Inc. Journal • Read the Journal

The Effect of High Voltage Transmission Lines on Property Values: A Contingent Valuation Approach

Author/s: Judith Callanan

Date Published: 1/01/2013

Published in: Volume 19 - 2013 Issue 2 (pages 173 - 185)

Abstract

This research investigates whether Contingent Valuation is meaningful in assessing the effect that High Voltage Transmission Lines (HVOTLs) have on property values. The research uses a Contingent Valuation approach, in conjunction with a hedonic pricing model and an attitudinal study. The results show a disparity between the discount in purchase price and how much owners would be prepared to pay to remove the HVOTLs. The hedonic pricing model results in a negative effect on those properties that are adjacent to the HVOTLs. However, the majority of owners opposed any form of contribution towards removing the HVOTLs. This research highlights that even though buyers believe the HVOTLs have a negative impact on their property values, they are not prepared to pay anything to have them removed and realise the increased value.

Download Full Article

Download the Full Article PDF

14445921.2013.11104379.pdf 14445921.2013.11104379.pdf (95kB)

Keywords

Contingent Valuation - Effect on Property Value - High Voltage Transmission Lines - Willingness to Pay

References

  • Callanan, J 2010, Are residents willing to pay for the removal of high voltage transmission lines from their neighbourhood?, RICS Cobra Conference, Paris.
  • Callanan, J and Hargreaves, RV 1994, ‘The effect of overhead transmission lines on property values’, New Zealand Valuers Journal.
  • Callanan, JM 1995, ‘The effect of overhead transmission lines on property values: a statistical analysis’, New Zealand Valuers Journal, June, pp. 35-38.
  • Carson 1992, A contingent valuation study of lost passive use values resulting from the Exxon Valdez oil spill, University Library of Munich, Munich.
  • Delaney, C and Timmons, D 1992, ‘High voltage power lines: do they affect residential property value’, Journal of Real Estate Research, Vol. 7, No. 3, pp. 315-330.
  • Freeman, M 1982, ‘Determining and measuring benefits’, in Metcalf, R and Stumm, W (Eds), Air and water pollution control: a benefit cost assessment, John Wiley & Sons, pp. 16-126.
  • Hanley, N 1997, Environmental economics: in theory and practice, MacMillan.
  • Ignelzi, P and Priestley, T 1991, A statistical analysis of transmission line impacts on residential property values in six neighbourhoods: volume 1, analysis and results, Southern California Edison Environmental Affairs Division, San Francisco.
  • Ignelzi, P and Priestley, T 1990, A methodology for assessing transmission line impacts in residential communities, prepared for Edison Electric Institute Siting and Environmental Planning Task Force, California.
  • Johansson, P 1987, The economic theory and measurement of environmental benefits, Cambridge University Press, Cambridge.
  • Kinnard, W 1994, Fear and property value: opinion survey results vs market sales evidence, International Association of Assessing Officers Conference, Seattle.
  • Kinnard, W 1997, The impact of proximity to electrical substations and a high voltage electricity transmission line in St Charles and St Louis counties, Missouri, January 1990-July 1996, American Appraisal Associates Report.
  • Kinnard, W and Dickey, DA 1995, ‘Primer on proximity impact research: residential property values near high voltage transmission lines’, American Society of Real Estate Counsellors, Vol. 20, No. 1.
  • Mundy, B and McLean, D 1998. ‘Using the contingent value approach for natural resources and environmental damage applications’, The Appraisal Journal, Vol. 66, No. 3.
  • NZ Government Valuation Department 1984, Overhead electric transmission lines: their effect upon the value of urban property, Valuation Department, Wellington.
  • Pearce, D and Turner, P 1990, Economics of natural resources and the environment, The John Hopkins University Press, USA.
  • Pitts, J and Jackson, T 2007, ‘Power lines and property values revisited’, The Appraisal Journal, Fall, pp. 323-325.
  • Randall, A 1974, ‘Bidding games for evaluation of aesthetic environmental improvement’, Journal of Environmental Economics and Management, Vol. 1, No. 2, pp. 132-149.
  • Sims, S and Dent, P 2005, ‘High-voltage overhead power lines and property values: a residential study in the UK’, Urban Studies, Vol. 42, No. 4, pp. 665-694.