The Coast Isn't Clear: An Economic Model of Home Values and Water Clarity in Suffolk County, N.Y

摘要

This research analyzes the Suffolk County, New York real estate market to determine if water quality in the three major Long Island water bodies (the Long Island Sound, the South Shore Bays, and the Peconic Estuary System) are affecting home values. Water quality is measured by clarity, as this is the most objective measure of a water body's quality that is readily available to property buyers and sellers. Suffolk County is an ideal location for this study, as water quality has been consistently monitored for more than four decades, and local water bodies regularly experiences dense algal blooms that can reduce water clarity. We make use of two spatial econometric models (spatial autoregressive model and spatial error model) in order to account for spatial dependency between nearby home sales. Our results indicate that improvements in water quality could drive increases in home values. These price premiums are found to be largely absorbed by waterfront and near-waterfront homes, with the impacting potentially extending up to 2000m from shore.