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CentrePiece article
In brief... Fear of fracking: the impact on UK house prices
Stephen Gibbons, Stephan Heblich, Esther Lho and Christopher Timmins December 2016
Paper No' CEPCP487:
Full Paper (pdf)

CentrePiece 21 (3) Winter 2016

JEL Classification: Q5; Q42; Q51

Tags: shale gas; fracturing; property valuation; housing prices; consumer expectation; hedonic price; united kingdom

Shale gas offers the prospect of a low-cost energy future – but does extracting it invoke anxieties about the possibility of environmental catastrophe among local residents? Research by Steve Gibbons and colleagues detects a distinct ‘fear of fracking’, as indicated by falling house prices in the one part of the country where exploratory drilling has taken place. Their study finds that house prices fell by up to 5% in the months after fracking triggered minor earthquakes. Compensation to local communities for the ‘psychological costs’ of fracking could be very costly.

This article summarises ‘Fear of Fracking: The Impact of the Shale Gas Exploration on House Prices in Britain’ by Steve Gibbons, Stephan Heblich, Esther Lho and Christopher Timmins, Spatial Economics Research Centre (SERC)Discussion Paper No. 207, October 2016.