Abstract: While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a difference-in-differences estimator with additional controls for house fixed effects and the boundary of the public water service area in Washington County, Pennsylvania to identify the capitalization of groundwater contamination risk in property values, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases property values. However, groundwater contamination concerns fully offset those gains by reducing property values up to 26 percent.

Abstract: Using the land tenure system in Ethiopia, where all land is state-owned and only farm households have usufruct rights, as a case study, we assessed the links between land owners’ tenure insecurity, associated behavioral factors, and contract length. In this paper, we analyze these links with survey data of rural households in the Amhara National Regional State of Ethiopia. The empirical strategy follows a hazard function model employed in duration data analyses and investigates the fitness of the data to the alternative exponential and Weibull functional forms. The results show that landlords’ risk aversion increases the duration of contracts, which is in line with the reverse tenancy argument that landlords’ risk preferences affect land-contract decisions. The findings of the study also indicate that tenure insecurity is a critical factor in the nature and length of contracts; hence, policies should aim to reduce landlords’ frustrations regarding future land redistribution by the state. An important implication of the results is that secure tenure systems can reduce the disincentives from tenure insecurity due to uncertainty about contract duration and thereby enhance tenants’ welfare. Longer-term and stable contracts can improve the land rental market. In addition, the impact of risk preferences points toward the importance of poverty in the functioning of the land rental market.