Coal-to-gas fuel switching and its effects on housing prices

We derive causal property value impacts of the coal-to-gas fuel switching conversion implemented by several power plants in the United States. We use an extensive dataset of property transactions around the country and adopt several spatial difference-in-difference approaches that use records of residential property transactions of homes with pollution exposure and proximity to the fuel-switching plants before and after the switch. The use of homes near coal-fired plants that did not innovate strengthens these estimations. The results suggest that the shutdown of coal-fired generators increased property values by roughly 12%–20% within 1 mile of distance from fuel-switching stations. These effects significantly increase once we consider wind exposure of homes around these plants, which brings to light the strong and localized disamenity effect of coal-fired power stations. Conservative back-of-the-envelope calculations suggest that the fuel-switching led to a $70-million increase in property values around the country.