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Wind and Property Values: Relation Unknown

By Kennedy Maize

Washington, Feb. 15, 2010 — Local opponents of wind farm developments often claim that the energy projects depress their property values. It’s a difficult issue to settle. The Department of Energy’s Lawrence Berkeley National Laboratory claimed last December in a $500,000 study, three years in the works – “The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis” – that the fear of property value declines is bogus.

The DOE study concluded that there was no evidence property values near wind farms were “consistently, measurably, and significantly affected by either the view of wind facilities or the distance of the home to those facilities.” A Lawrence Berkeley press release quoted the study’s author, consultant Ben Hoen, “Neither the view of wind energy facilities nor the distance of the home to those of the homes to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes.”

The study team collected data on 7,500 single-family home sales for residences within 10 miles of 24 current wind projects in nine states, according the LBNL press release. The sales took place between 1996 and 2007.

The study drew praise from wind developers. Denise Bode, head of the American Wind Energy Association, the industry’s Washington lobbying group, said, “The conclusions of this study could not be more definitive—wind farms do not weaken property values. These important research findings offer good news for those communities that might be considering the location of wind farms nearby. Wind energy has multiple benefits: it creates jobs, reduces greenhouse gases, and delivers direct economic benefits to rural communities. Now we can also say that wind energy has no impact on property values.”

Not so fast, Denise. Albert R. Wilson, a national expert on real estate valuation, got wind of the study, looked at it, and found its methodology dodgy. His target was the way the LBNL researchers used “hedonic analysis” in their paper.

The LBNL study rests on regression analysis, which is what hedonic analysis means. In a private paper – “Wind Farms, Residential Property Values, and Rubber Rulers” – Wilson explained: “A regression is a statistical process that attempts to quantify a hypothetical relationship between certain factors (explanatory variables) and the value of an outcome (dependent variable).”

Economists Fritz Roka and Raymond Palmquist at North Carolina State University note, “Hedonic techniques have attracted the interest of economists as a means of measuring values of non-market goods. By studying the market transactions of differentiated products such as automobiles and houses, implied values and corresponding demand schedules can be estimated for underlying characteristics such as automobile safety features, two-car garages, and air quality of residential neighborhoods.”

Wilson adds that there are “literally thousands of possible real estate regression models.” There is also “a well developed and tested set of standards” to guide model choices, he says. For the LBNL report, Wilson says, “There is no evidence whatever” that the researchers “employed any standards.”

It also appears, Wilson says, that the LBNL report omitted important variables. The LBNL model may include sales prices in areas of declining population, where prices are not comparable to areas of increasing population, demand, and housing prices. The LBNL analysis, says Wilson, aggregates sales data nationwide, which is “a gross oversimplification that cannot provide for the specificity required to answer a micro-question such as an influence on sales price from a highly localized condition – distance to or view of a wind energy project.”

Wilson says he has “no opinion on the influence of wind farms on residential sales prices.” But his concerns with methodology lead him to argue that the LBNL report “should not be given serious consideration for any policy purpose. The underlying methods cannot be show to be reliable or accurate.”

So where does that leave us on the question of whether windmills reduce property values? After three years and half-a-million in research, the question, in my mind at least, remains unanswered.

What to Make of Climate Science

By Kennedy Maize

Here at my western Maryland farm, we just got the fourth significant snowfall of the winter. We caught four inches while we were on vacation in the South Pacific in late November, over 20 inches on December 20, six inches a few days ago, and four inches last night (Feb. 2). The National Weather Service says we are going to get another foot or so over the weekend.

Last winter, we had very little snow. According to the Washington Post, the region got fewer than 10 inches of snow each of the past three years.

Must be global warming, right? Wrong, of course. Weather and climate are not the same thing. This is an El Nino year, and the results are showing up on my farm. I’m prepared for the snow, and I’m not complaining. Winter snow means a well-charged summer aquifer for those of us who live on wells and septic systems.

I raise the issue because the louder acolytes of global warming — or, as they now prefer, climate change — always claim that extreme weather events are the result of man-made emissions of carbon dioxide. Unless, of course, the events are wintry. Hurricanes, glacial melts, torrential monsoons, all reveal the hand of man, according to the climate orthodoxy. Snow storms and frigid temperatures are just weather.

You can’t have it both ways.

Now, the orthodoxy is faltering and the heterodox crowd (count me in) are beginning to gain some public traction. As the science behind the United Nation’s 2007 Intergovernmental Panel on Climate Change (IPCC) report becomes increasingly suspect, who can honestly believe that anything weather-related is climate-related? Or vice-versa?

The recent revelations about the allegedly scientific endeavors of the IPCC are very troubling. In December, we learned that the climate gurus at the UK’s Climate Research Unit were cooking the books on past climate patterns in order to forestall skeptical analysis, AKA “Climategate.”

Then it turned out that the IPCC accepted unscientific reports on glacier melting in the Himalayas and South America, in order to bolster the case for policies to reduce CO2 emissions. The IPCC report relied on unreviewed claims put forth by an advocacy group, World Wildlife Fund.

Now, a leading researcher has disputed the IPCC’s assessment of the impact of global warming on the Amazon rainforest, also apparently based on unreviewed material in a WWF report. A leading academic researcher called the IPPC work on the effects of global warming on rain forests “a mess,”, adding that the WWF report “contains no primary research data”.

A couple of years ago, after Hurricane Katrina, climate campaigners, including some reputable scientists, claimed that climate warming was causing extreme hurricane events. The actual hurricane scholars scoffed. Since then, hurricane seasons have been relatively benign. The advocates of catastrophe were proven wrong.

The lesson from all of this is that climate claims, particularly those based on the 2007 IPPC report, are not reliable. They may be right, but they may be very wrong, and it’s difficult to tell who has the correct story. That’s always been the case, but the latest revelations show that some scientific “claims” were meaningless from the beginning and remain bogus.

How to tell what’s real and what’s faked? That’s the trick, and it’s a difficult task for anyone really concerned about the science of global warming.

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