Assessing the Impact of Aquaculture on Residential Property Values

Project Description

Social acceptance is a major component in slowing the growth of the U.S. marine aquaculture industry. One of the principal concerns that is frequently heard during lease hearings, is that property values will be adversely affected if a nearby aquaculture farm is allowed to develop. Unfortunately, there are few, if any, analyses of the effects of aquaculture farms on nearby property values, and is therefore an area open for contention.

Project personnel argue that the impact of aquaculture operations on property values can be scientifically modeled and quantitatively measured. Improving knowledge of the extent and nature of such an impact will be crucial in future debates on lease applications and will ultimately lead to the growth of the U.S. marine aquaculture industry. The current project advances the understanding of how place-based complexities influence adoption of SEA and can support sustainability trajectories within bioregions.

The project provides significant and important empirical results that could support sustainable domestic marine aquaculture development in the short-term (one-two years after project completion). Project personnel are implementing a hedonic model analysis to calibrate the economic impacts of aquaculture operations on real estate markets. Project personnel have designed and estimated hedonic property value models to examine property values and sales patterns before and after aquaculture leases. Hedonic models of property values explain the variations of housing prices as a function of property and structural attributes, e.g., lot size and adjacency to aquaculture operations.

Results and Accomplishments

Project personnel are studying several representative township units where aquaculture operations have been established. Descriptive information of Maine aquaculture farms such as timing of lease and operations, species, size, and management have been obtained through a partnership with the Maine Aquaculture Association. Combining these data sets with the available information on environmental characteristics, including spatial data describing climate and landscape, enable a thorough analysis of the economic effects of aquaculture leases on property values. The temporal and spatial dimensions of the potential effects will be evaluated using spatio-temporal models. Because the panel structure of the data brings about a major challenge to ordinary time series methods and spatial statistics techniques, parametric spatio-temporal models are being applied instead. Using this category of models, spatio-temporal correlation among property prices are accounted for. Spatial spillovers and temporal diffusions of aquaculture operations on housing markets are being assessed respectively.

Preliminary research during Year 4 suggests wide spatial variation in preference for the placement of aquaculture in coastal waters, even within the same bay. This analysis (with Master’s degree student Robichaud) is ongoing – completion of this component of the project is anticipated in 2019. Additional work by new SEANET Master’s degree students (Amy Bainbridge, Olga Bredikhina, and Avery Cole) constructing spatial data on “line of sight” of coastal aquaculture with residential properties is nearly complete. Analysis using this new data is in its early stages.

Summary of Data Being Collected

Data	Type	Quantity	Location
Confidential Housing transactions	Quantitative	All single-family home sales between 2012-2014	Maine
Aquaculture siting data (GIS)	Spatial (GIS)	All AQ leases sited in Maine from 1981-2015	Coast wide
Aquaculture lease hearing transcripts	Qualitative	263	Coast wide