New Study Shows Fracking Decreases Value of Homes Near Sites

A new study conducted by economists at Duke University and researchers at Resources for the Future has concluded that property owners who live near fracking wells suffer a major loss in property value because of potential buyers’ worries over water contamination. Fracking (hydraulic fracturing) is a method of extracting trapped gas from shale deposits that injects chemically treated liquids into underground wells under high pressure. Many people fear that the chemicals from that injected liquid will seep out of the gas wells and make their way into underground aquifers, thus poisoning local water supplies.

In the study, researchers discovered that Pennsylvania homeowners who use local groundwater for drinking supplies lost up to 24 percent of their property value if they were within a mile and a quarter of a fracking site. The study is one of the first that measures the impact on property owners of the fracking boom across the country. Its results are being published at a time when the debate over allowing fracking is dominating political discussions in states such as New York and Pennsylvania, where shale formations filled with gas lure oil companies and frighten citizens.

While scientists cannot yet conclusively state that fracking pollutes groundwater, the mere possibility that it could is enough to drive down property values, according to the study findings. Researchers noted that the 24 percent drop in home values was caused by public perception rather than hard scientific evidence.

“The perception of how much risk there is of groundwater contamination from fracking is tremendous,” said Lucija Muehlenbachs of Resources for the Future, who conducted the study with Elisheba Spiller and Chris Timmins of Duke University.

To reach their conclusions, researchers looked at property values of all homes in Washington County, Pa., an area near Pittsburgh that is at the center of the state’s fracking boom. There were just over 200 homes within a mile and a quarter of the fracking well they examined.

About half the homes evaluated used piped water, whereas the other half relied on water wells that drew from local groundwater. The homes that used local groundwater saw a significant loss in value, suggesting that future losses could lead to an increase in the foreclosure rate in areas experiencing rapid increases in fracking operations.

In announcing their findings, researchers suggested the evidence “provides added impetus for regulators to protect groundwater under hydraulic fracturing sites and for industry to increase transparency and voluntary action to reduce water contamination concerns.”


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