Human-induced earthquakes, risk salience, and housing values

摘要

Oklahoma's households have recently faced several thousand higher-probability but low-impact earthquakes induced by nearby shale gas development. This type of seismic activity is different from natural-occurring earthquakes, which are generally constituted by one, high-loss event. We investigate the mechanisms through which earthquakes may influence household perceptions of risk by modeling changes to property values in and out of seismically-active zones. We estimate that the induced earthquakes are spatially concentrated, which is partially influenced by governmental limits placed on natural gas production and wastewater injections. Additionally, we explore the underlying measure of earthquake intensity and identify its importance in modeling seismic impacts. Controlling for the stock-flow dynamics of seismicity through time, we estimate that Oklahoma County's cumulative experience of earthquakes led to a diminution of property values. The impacts are further exacerbated by risk-saliency effects, as reflected in declining values associated with nearby wastewater injections and natural gas production. Published by Elsevier B.V.