Elisheba Spiller

The Housing Market Impacts of Shale Gas Development

Using data from Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source, well productivity, and visibility. Results indicate large negative impacts on nearby groundwater-dependent homes, while piped-water-dependent homes exhibit smaller positive impacts, suggesting benefits from lease payments. Results have implications for the debate over regulation of shale gas development. (JEL L71, Q35, Q53, R31)

Evaluating “Cash-for-Clunkers”: Program effects on auto sales and the environment

“Cash-for-Clunkers” was a

Shale Gas Development and Property Values: Differences Across Drinking Water Sources

3 billion program that attempted to stimulate the U.S. economy and improve the environment by encouraging consumers to retire older vehicles and purchase fuel-efficient new vehicles. We investigate the effects of this program on new vehicle sales and the environment. Using Canada as the control group in a difference-in-differences framework, we find that, of the 0.68 million transactions that occurred under the program, the program increased new vehicle sales only by about 0.37 million during July and August of 2009, implying that approximately 45 percent of the spending went to consumers who would have purchased a new vehicle anyway. Our results cannot reject the hypothesis that there is little or no gain in sales beyond 2009. The program will reduce CO2 emissions by only 9–28.2 million tons based on upper and lower bounds of the estimate of the program effect on sales, implying a cost per ton ranging from

Understanding the Heterogeneous Effects of Gasoline Taxes Across Income and Location

92 to

Household Vehicle Bundle Choice and Gasoline Demand: A Discrete-Continuous Approach

288 even after accounting for reduced criteria pollutants.

The Effect of Gasoline Taxes and Public Transit Investments on Driving Patterns

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.

Shale Gas Development and the Costs of Groundwater Contamination Risk

Using disaggregated confidential household data, we estimate spatial variation in householdlevel gasoline price elasticities and the welfare effects of gasoline taxes. A novel approach allows us to model a discrete-continuous household choice of vehicle bundles, while disaggregating the choice set and including vehicle-specific fixed effects and unobserved consumer heterogeneity. The mean elasticity of demand for gasoline is -0.67, but with tremendous variation across location and income. We find that rural households have 30% more negative welfare impacts than urban households from gasoline taxes. Finally, we explore different policies that can help to mitigate welfare inequalities due to these taxes. 1 Elisheba Spiller, Postdoctoral Fellow, Resources for the Future, Washington, DC, spiller@rff.org Heather M. Stephens, Assistant Professor, Department of Economics, California State University, Long Beach, Heather.Stephens@csulb.edu

Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?

Accurately estimating the price elasticity of demand for gasoline is fundamental in many different policy settings, in that how consumers respond to changing gas prices significantly affects the outcome of policy forecasts and debates. This paper simultaneously addresses four common modeling assumptions frequently used in gasoline demand estimation that cause the researcher to underestimate this elasticity. These are (i) ignoring the role of bundle effects in the driving decision; (ii) over-aggregation of the choice set; (iii) ignoring the inter-relatedness of the decisions about how much to drive and what vehicles to purchase; and (iv) failing to account for unobserved vehicle attributes. While methods typically found in the literature can only deal with a subset of these issues at a time, the empirical technique I employ (which is based on revealed preference inequalities) easily allows for an integrated analysis that deals with all of these concerns. Furthermore, this approach allows me to test the impact of each of these assumptions, both independently and jointly, on the elasticity estimate. By utilizing disaggregate household data from the National Household Transportation Survey in 2001 and 2009, I demonstrate that the researcher may underestimate the elasticity up to 66% if these aspects of the vehicle purchase and driving decisions are not taken into consideration.

The Housing Market Impacts of Shale Gas Development: Corrigendum

This paper analyzes how driving patterns are affected by gasoline taxes and the availability of a substitute for driving—public transportation. We develop a measure of transportation substitutability based on the difference between individuals’ predicted commute times by private and public transit, conditional upon their demographic characteristics and geographic location. Improved substitutability decreases annual vehicle miles traveled (VMT) by inducing modal shifts to public transit, though gasoline taxes are found to have a much larger impact on VMT. Our results imply that a policy that raises gasoline taxes and recycles the revenues into public transit improvements can have even larger impacts on driving patterns than either policy alone.

The environmental impacts of green technologies in TX

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a difference-in-differences estimator with additional controls for house fixed effects and the boundary of the public water service area in Washington County, Pennsylvania to identify the capitalization of groundwater contamination risk in property values, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases property values. However, groundwater contamination concerns fully offset those gains by reducing property values up to 26 percent.