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The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model

This paper examines the impacts of wind turbines on property values. The researchers look at distance and other factors, including visual effect and shadow flicker. The results found that property values were reduced particularly for properties within 1.5 kilometers of the turbines. The abstract and portions of the conclusion are provided below. The full paper can be accessed by clicking the links on this page.

ABSTRACT: Wind power is the most important renewable energy source in many countries today, characterized by a rapid and extensive diffusion since the 1990s. However, it has also triggered much debate with regard to the impact on landscape and vista. Therefore, siting processes of wind farm projects are often accompanied by massive public protest, because of visual and aural impacts on the surrounding area. These mostly negative consequences might be reflected in property values and house prices. The aim of this paper is to investigate the impacts of wind farms on the surrounding area through property values, by means of a hedonic pricing model, using both a spatial fixed (viewshed) effects (accounting for spatially clustered unobserved influences) and a Geographically Weighted Regression model (accounting for spatial heterogeneity). The analysis is the first of its kind undertaken for a local region in Continental Europe (North Rhine-Westphalia, Germany). Viewsheds are calculated for each property using a digital surface model. Focusing on proximity and visibility effects caused by wind farm sites, we find that proximity, measured by the inverse distance to the nearest wind turbine, indeed causes significant negative impacts on the surrounding property values. Thereby, local statistics reveal varying spatial patterns of the coefficient estimates across and within the city areas and districts. In contrast, no evidence is found for a statistically significant impact of the visibility of the wind farm turbines. 

CONCLUSION (Excerpts): According to the estimation results provided by the spatial fixed effects regressions, there is statistical evidence for a negative impact of wind farm proximity measured by the inverse distance to the nearest turbine. Various distance dummies also indicated that negative impacts are mainly limited to properties in the immediate vicinity within 1.5 km. Due to lower significance levels of the distance dummy variables, local variations of coefficients and significance levels needed further consideration. Properties that were sold after the construction of the wind farm showed lower values compared to those which were sold before, indicating a negative post-construction effect. Alternatively, the announcement of the wind farm project had no measurable influence on property prices. The results obtained for the shadow flickering variables did not allow for a clear interpretation.

The fixed viewshed effects model provided the lowest values regarding the overall model performance, although the results were largely consistent with the other models. The major insight is that absorbing potential effects of visibility, the inverse distance to the nearest turbine still remains negatively significant. 

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Source: https://www.fcn.eonerc.rwth...

MAR 2 2013
http://www.windaction.org/posts/48904-the-impact-of-wind-farms-on-property-values-a-geographically-weighted-hedonic-pricing-model
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