NATIONAL BUREAU OF ECONOMIC RESEARCH
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What Lies Beneath: Pipeline Awareness and Aversion

Evan Herrnstadt, Richard L. Sweeney

NBER Working Paper No. 23858
Issued in September 2017
NBER Program(s):Environment and Energy Economics

Stated safety concerns are a major impediment to making necessary expansions to the natural gas pipeline network. While revealed willingness to pay to avoid existing natural gas pipelines appears small, it is difficult to know if this reflects true ambivalence or a lack of salience and awareness. In this paper, we test this latter hypothesis by studying how house prices responded to a deadly 2010 pipeline explosion in San Bruno, CA, which shocked both attention and information. Using multiple identification strategies, we fail to find any evidence of a meaningful shift in the hedonic price gradient around pipelines following these events. We conclude with a discussion of how this result relates to latent, fully informed preferences, as well as the implications for future pipeline expansions.

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Document Object Identifier (DOI): 10.3386/w23858

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