Estimating the Value of Undergrounding Electricity and Telecommunications Networks

Abstract

Underground low-voltage electricity and telecommunications networks have a number of advantages over overhead networks, including reliability of supply, safety and improved visual amenity. This article investigates the value of these benefits to households by estimating the relationship between house prices and type of network service in three suburbs in Canberra, Australia. Holding other house and neighbourhood characteristics constant, we find that underground networks increase house prices by 2.9 per cent. Although the electricity network in Canberra has some unusual features, this approach can provide valuable information to policy-makers considering undergrounding programs in residential areas.

International Real Estate Review

“…The burying of 500 kV cables requires periodic vaults for cooling and venting which are disruptive to immediately proximate home owners, but presumably at a much lower level than towers. A potential future avenue of study would be therefore to examine the price impact of the positive announcement of tower removal (see Simons andSaginor 2006 andMcNair andAbelson 2010). Current ongoing construction of the underground transmission line complicates the study, but eventually, transaction volume in the post tower period will be sufficient to investigate the apparent asymmetry between "bad" and "good" announcements as noted by Simons and Saginor (2006).…”

“…December 2009 (when the CPUC approved tower construction), or March 2007 (when SCE publicized the project), though July 2013, (when the CPUC voted to underground the transmission line).11 SeeMcNair and Abelson (2010) for an empirical study of the economic impact of placing utility cables underground.12 We include a one month lag between the date of the sales contract and transfer of ownership.13 Closest distance to a "path" was computed brute force by placing a latitude/longitude marker every 10 m or so on its centerline, and then finding the distance of the property to the closest point on the path.…”

Modelling House Prices across Sydney

“…There is a great deal of evidence that environment, either as a holistic attribute of a neighbourhood or as a specific attribute of a house, is likely to have significant impacts on house prices (Boardman et al ; Kuminoff, Parmenter and Pope ; McNair and Abelson ). These environmental factors may be scattered randomly around an urban area and have little connection with distance from the CBD, as in Figure .…”

Valuing externalities from energy infrastructures through stated preferences: a geographically stratified sampling approach

“…McNair and Abelson (2010) estimate by hedonic pricing the value of undergrounding electricity and telecommunication networks in Australia. A contingent valuation (CV) study by McNair et al (2011a,b) estimates the willingness to pay for undergrounding portions of the distribution (Low Voltage) network, again in Australia; a recent work by Ju and Yoo (2014) measures the environmental costs of overhead power transmission lines in Korea by using a choice experiment (CE).…”