The housing market impacts of wastewater injection induced seismicity risk

Ferreira, Susana; Liu, Haiyan; Brewer, Brady

doi:10.1016/j.jeem.2018.08.006

Cited by 23 publications

(7 citation statements)

References 45 publications

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“…Historically considered unprofitable, fracking involves injecting water, sand, and chemicals into underground rock formations to produce oil and natural gas (Ferreira et al, 2018). Fracking has been widely used to produce crude oil in the United States for over 60 years, boosting U.S. energy production to unprecedented levels (Feyrer et al, 2017).…”

Section: Background and Empirical Predictionsmentioning

confidence: 99%

Carbon emissions, fracking, and firm value of U.S. oil and gas firms

Mollick,

Haidar

2023

Bus Strat Env

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We examine in this paper how firm value (market‐to‐book ratio, MTB) of U.S. oil and gas sector firms from 2010 to 2020 responds to carbon emissions intensity measures. We investigate three measures comprising total carbon emissions relative to assets, to market value of equity, and to net property, plant, and equipment. Our dynamic panel data approach separates the 82 firms into 35 fracking and 47 non‐fracking companies to address features underlying firm financing during the shale oil revolution. Concerned investors about the companies' large carbon emissions may have pulled out of the sector. These companies may also have overleveraged when expanding into new technologies of oil production or kept larger cash flow ratios. We report lower average carbon emissions for fracking firms, together with the larger size of fracking techniques: mean of assets of $46 billion for fracking versus $12 billion for non‐fracking companies. Using fixed‐effects and system generalized methods of moments (SGMM) models, we find that carbon emissions decrease MTB of fracking firms more than non‐fracking firms. Our dynamic panel approach provides a more accurate measure of the real effect of carbon emissions that is very robust to Tobin's q as alternative measure of firm value.

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Section: Background and Empirical Predictionsmentioning

confidence: 99%

Carbon emissions, fracking, and firm value of U.S. oil and gas firms

Mollick,

Haidar

2023

Bus Strat Env

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“…Their findings are consistent with those of previous studies on the manifestation of earthquake risk perceptions. Ferreira, Liu, and Brewer [51] examined the impact of seismic risk perception from wastewater injection, which is known to potentially induce earthquakes. They found that nearby earthquakes significantly increased the perceived risk, but their effect was limited to areas within 2 km of the injection well.…”

Section: Empirical Review Of Seismic Risk and Property Valuesmentioning

confidence: 99%

Impact of Induced Seismicity on the Housing Market: Evidence from Pohang

Hong

Seo

et al. 2022

Buildings

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In this study, we analyze the case of induced seismicity in Pohang, South Korea, in 2017 to investigate the effect of seismic risk perception on the local residential property market. Based on a hedonic pricing model with a difference-in-differences method, we examine the geographic distribution of the effects of unexpected earthquake hazards. Our results indicate an overall reduction in local property values, but the magnitudes of negative externality for housing prices decrease with respect to the distance from the epicenter. In areas within 3 km of the epicenter, the asset value reduced by approximately 20% after an earthquake event, but if the distance from the epicenter was higher than 12 km, the negative effect on the price was not significant. In addition, we examine how the experience of seismic events affect the preference on the anti-seismic building structure. The results show that the market valuation on the anti-seismic system significantly escalated after the earthquake.

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“…Increased seismic activity in the central and eastern United States has been associated with wastewater injection wells (Weingarten et al 2015). Using a hedonic valuation framework, Cheung et al (2018), Ferreira et al (2018, and Burnett & Mothorpe (2021) value seismicity risks associated with wastewater disposal injection wells in Oklahoma. These studies find evidence of declining housing prices owing to seismic risk.…”

Section: Water Scarcitymentioning

confidence: 99%

Economic, Environmental, and Health Impacts of the Fracking Boom

Black

Boslett

et al. 2021

Annu. Rev. Resour. Econ.

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The shale gas boom revolutionized the energy sector through hydraulic fracturing (fracking). High levels of energy production force communities, states, and nations to consider the externalities and potential risks associated with this unconventional oil and natural gas development (UOGD). In this review, we systematically outline the environmental, economic, and anthropogenic impacts of UOGD, while also considering the diverse methodological approaches to these topics. We summarize the current status and conclusions of the academic literature, in both economic and related fields, while also providing suggested avenues for future research. Causal inference will continue to be important for the evaluation of UOGD costs and benefits. We conclude that current economic, global, and health forces may require researchers to revisit outcomes in the face of a potential shale bust. Expected final online publication date for the Annual Review of Resource Economics, Volume 13 is October 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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The housing market impacts of wastewater injection induced seismicity risk

Cited by 23 publications

References 45 publications

Carbon emissions, fracking, and firm value of U.S. oil and gas firms

Carbon emissions, fracking, and firm value of U.S. oil and gas firms

Impact of Induced Seismicity on the Housing Market: Evidence from Pohang

Economic, Environmental, and Health Impacts of the Fracking Boom

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