What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania

Weber, Jeremy G.; Hitaj, Claudia

doi:10.1017/s1068280500010212

Cited by 23 publications

(18 citation statements)

References 11 publications

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“…Since only 28 percent of the housing transactions in their study involved an active lease, leasing would account for an average increase in housing values of just 1 percent. This is consistent with Weber and Hitaj (), who find evidence from farm real estate values in the Barnett Shale that surface owners generally do not own the rights to the gas beneath the surface.…”

Section: Alternative Interpretations and Confounding Factorssupporting

confidence: 90%

Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property

Weber

Burnett

Xiarchos³

2016

J Policy Anal Manage

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We study the effects of the property tax base shock caused by natural gas drilling in the Barnett Shale in Texas-a state that taxes oil and gas wells as property. Over the boom and bust in drilling, housing appreciation closely followed the oil and gas property tax base, which expanded the total tax base by 23 percent at its height. The expansion led to a decline in property tax rates while maintaining or increasing revenues to schools. Overall, each $1 per student increase in the oil and gas property tax base increased the value of the typical home by $0.15. Some evidence suggests that the cumulative density of wells nearby may lower housing values, indicating that drilling could reduce local welfare without policies to increase local public revenues.

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Section: Alternative Interpretations and Confounding Factorssupporting

confidence: 90%

Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property

Weber

Burnett

Xiarchos³

2016

J Policy Anal Manage

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“…Land price has also an informational content about underground resources not directly related to the agricultural use. Recent papers have called for attention to be paid to the presence of shale gas development opportunities which might affect the findings obtained from hedonic regressions on land prices, due to dis-amenities caused by such natural opportunities (Weber and Hitaj, 2015). Among the extrinsic attributes capitalized in land prices, institutions and human improvements are also investigated though the PVM applied to land prices.…”

Section: The Value Of Intrinsic Environmentmentioning

confidence: 99%

The Informational Content of Land Price and its Relevance for Environmental Issues

Latruffe

2017

IRERE

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As the support of human and natural activities, land is a resource of major interest both for environmental and socioeconomic issues. Research aimed at improving land management and conservation has long recognized the need to integrate both issues, but a consensual and consistent framework is still lacking. We argue that land price could be one of the possible links here, as a consistent proxy for some of the multiple dimensions of values that people put on land resources. We present the elementary economic theory about land price, namely the present value model, and we review the abundant empirical literature using this classical theory to study the informational content of land price. We then propose a typology of this literature, highlighting its strengths and weaknesses, in order to guide future environmental research which aim at drawing out some socioeconomically oriented policy recommendations.

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“…In both zones, most appreciation of farmlands occurred exactly when land was leased for drilling, not when drilling and production were at their peak. They found that the effects changed by agricultural land type, which may mirror a connection between agricultural land types and the presence of mineral rights, in here, the ownership of oil and gas rights (Weber and Hitaj, 2015).…”

Section: Agricultural Land Valuesmentioning

confidence: 77%

“…In addition, the study conducted by (Baen, 1996) found oil and gas activities cause damage to surface land, therefore, the surface land loses its property value. Also, (Weber and Hitaj, 2015) mentioned in the conclusion of his study the two mechanisms of mineral rights when he concluded that drilling can create ecological disamenities and influence the land's suitability for the utilizations that give it value and that Shale gas development influences self-reported agricultural real estate values. Some farmers incorporate their oil and gas rights in the market estimation of their property.…”

Section: Comparing Our Study Results To Other Studiesmentioning

confidence: 99%

“…On one hand, investment of royalty payment in improvements to land or structures, greater local public revenues and overall greater interest for land ought to bring about appreciation amid the peak drilling stage. On the other hand, different factors could bring about depreciation: well productivity can decrease exponentially not long after being drilled and drilling can create ecological disamenities and influence the land's suitability for the utilizations that give it value (Weber and Hitaj, 2015).…”

Section: Agricultural Land Valuesmentioning

confidence: 99%

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The Impacts of Energy Development on Agricultural Land Values in North-Central West Virginia

Warr¹

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The Impacts of Energy Development on Agricultural land Values in North-Central West Virginia Adama Sileye Warr This study presents an empirical model that explains the impact of energy development activities on agricultural land values in north-central West Virginia. Based on the methodology and the data description, seven different models (linear and logs) are estimated and the results are analyzed to understand the contributions of each energy variable used in the models to the overall values of farmlands. We have examined 311 parcel-level sales of farmlands in 16 counties in the north-central of the state of West Virginia from January 2013 to July 2016. The results suggest that the selected model is statistically different from zero (prob> F= 0.000). Moreover, the model explains 40% in the variation of log per acre price. For the energy development variables, mineral rights transferred with agricultural land property have a positive, statistically significant (at the 10% level) coefficient in the model (as was expected). The more acres of mineral rights a parcel transfer contains, the higher its price should be compared to the one that has similar characteristics but not mineral rights. I would like to acknowledge the love, encouragement, and prayers of my mother, Raki Demba Ba, my siblings, and my wife, Binta Oumar Ba. Finally, I would like to thank my brother, Mamadou Warr, my great cousins, Amadou Ba, Moustapha Lemhamed Dicko, Maloum Aly Sall, and Abdoulaye Sall, my great friends, Ibrahima Bakayoko, Alassane Tall, and Abdallhi Fall, and all my friends who have encouraged me in difficult times during the course of my graduate studies. This thesis is dedicated to the memory of my father, Thierno Sileye Warr.

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What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania

Cited by 23 publications

References 11 publications

Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property

Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property

The Informational Content of Land Price and its Relevance for Environmental Issues

The Impacts of Energy Development on Agricultural Land Values in North-Central West Virginia

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