Smelly local polluters and residential property values: A hedonic analysis of four Orange County (California) cities

We propose a simple framework combining GIS and hedonic pricing to evaluate the impacts of local industrial odors on surrounding residential houses for four Southern California cities. Using GIS, we flag houses located at various distances from car paint-shops and smelly polluters in the EPA's NET database. After accounting for heteroskedasticity through feasible GLS, we find a statistically significant reduction in house prices of up to 3.4\%. These results have implications for the local control of industrial odors.