6.05 – The Effect of a Large Hog Barn Operation on Residential Sales Prices in Marshall County, KY

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In this paper, we examine the economic impact of a tightly clustered complex of hog barns, a type of concentrated animal feeding operation (CAFO) on residential property in a rural area near Benton, Kentucky. The operation creates noxious and offensive odors associated with swine-raising and waste disposal activities. Theory and practice indicate that buyers would avoid purchasing a property believed to be contaminated or subject to effects of unsustainable environmental disamenities. Using hedonic regression analysis, the results show price reductions of 23%–32% for residential properties sold within 1.25 miles of the facility, and much larger losses northeast (downwind) of the facility.

 

Authors: Robert A. Simons, Youngme Seo, and Spenser Robinson

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