Impact of waterborne E. coli outbreaks on local communities: evidence from housing transactions in Michigan

Abstract

Waterborne Escherichia coli (E. coli) represents a pervasive water quality problem across the United States. In Michigan, the presence of E. coli has become problematic for many areas where agricultural run-off and ineffective policies have made these outbreaks endemic. Combining the universe of housing transaction datasets from 2009 to 2017 with the State of Michigan water sampling dataset, we investigate and quantify the negative impacts of E. coli outbreaks on local housing prices. Our difference-in-differences model estimates an overall impact of −8.94% for houses in the treatment group relative to the control group. However, this effect is only short term, as sales prices recover after the outbreak has ended.