A growing number of hotels provide “green” lodging for travelers with strong environmental preferences. Twelve states have developed certification programs to regulate these claims. After describing the new market for green lodging, we use data on prices and amenities of “green” and “brown” hotels in Virginia to estimate a hedonic model of hotel room pricing. We find that travelers can expect to pay a significant premium for a standard room in a green hotel. An internal meta-analysis is used to evaluate the robustness of this result to subjective econometric modeling decisions. Our results indicate a premium between $9 and $26.

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This paper examines the impact of arsenic contamination of groundwater on sale prices of residential properties and bare land transactions in two Maine towns, Buxton and Hollis, that rely on private wells to supply their drinking water. Prompted by tests of well water by the state of Maine, media attention focused on the communities in 1993 and 1994 when 14% of private wells were found to have arsenic concentrations exceeding the U.S. Environmental Protection Agency standard of 0.05 mg/L. Households could mitigate the serious health risks associated with arsenic ingestion by purchasing bottled water or by installing a reverse osmosis home treatment system. Our results indicate that the initial arsenic finding in 1993 led to significant, but temporary, 2 year decreases in property prices. This is a much shorter effect on prices than has been observed for Superfund sites, where prices can be depressed for a decade. These results suggest that a property‐specific contamination incident that is treatable may not have a long‐lasting effect on sale prices, but further research is needed to confirm if the dissipation of the price effect was actually due to the installation of in‐home water treatment systems or due to the dissipation of perceived risk once the media coverage stopped.

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