The Housing Market Impacts of Wastewater Injection Induced Seismicity Risk Haiyan Liu Ph.D. Candidate Department of Agricultural and Applied Economics University of Georgia
[email protected] Susana Ferreira Associate Professor Department of Agricultural and Applied Economics University of Georgia
[email protected] Brady Brewer Assistant Professor Department of Agricultural and Applied Economics University of Georgia
[email protected] Selected Paper prepared for presentation at the Agricultural & Applied Economics Association’s 2016 AAEA Annual Meeting, Boston, MA, July 31- August 2, 2016. Copyright 2016 by Haiyan Liu, Susana Ferreira, and Brady Brewer. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided this copyright notice appears on all such copies. Abstract Using data from Oklahoma County, an area severely affected by the increased seismicity associated with injection wells, we recover hedonic estimates of property value impacts from nearby shale oil and gas development that vary with earthquake risk exposure. Results suggest that the 2011 Oklahoma earthquake in Prague, OK, and generally, earthquakes happening in the county and the state have enhanced the perception of risks associated with wastewater injection but not shale gas production. This risk perception is driven by injection wells within 2 km of the properties. Keywords: Earthquake, Wastewater Injection, Oil and Gas Production, Housing Market, Oklahoma JEL classification: L71, Q35, Q54, R31 1. Introduction The injection of fluids underground has been known to induce earthquakes since the mid-1960s (Healy et al. 1968; Raleigh et al. 1976). However, few cases were documented in the United States until 2009.