| This study extends Kohlhase's (1991) examination of the impact of Superfund sites on housing values in Houston for the purpose of evaluating the extent to which post-remediation price recovery has occurred. In the process, the paper examines more closely several key methodology issues associated with Kohlhase's approach. By more appropriately treating the type of census variables utilized in the Kohlhase study as endogenous variables, themselves impacted by proximity to these E.P.A superfund sites, it is found that the pecuniary impact upon nearby residential markets is significantly greater than her original study indicated. This study also documents a significant amount of direct property valuation impacts through the demographic changes in neighborhoods that proximity to toxic waste sites can produce, a phenomenon which McCluskey and Rausser (1999) refer to as "path dependence."; In harmony with Kohlhase's initial intuition, the findings in this study confirm that there is a significant degree of post-remediation price recovery, though even 20 years after the original E.P.A designation of Superfund sites; full price recovery had not been achieved. While the simple direct impact of proximity to Superfund sites decline substantially, the persistence of the demographic effects on price account for a large portion of the resistance in price recovery. Thus, this study concludes that while remediation does partially ameliorate the negative price impacts associated with toxic waste sites, there remains a significant amount of inertia in the price recovery process, verifying common wisdom in the urban economics literature that reverse tipping of neighborhoods is difficult and problematic. |
