Do oyster farms actually reduce the property values? Empirical evidence from Rhode Island

While there in general appears to be public support for shellfish aquaculture operations, the construction of oyster farms often meets opposition where an important argument is devaluation of housing property. This makes it important to study the effect of construction of oyster farms on property value. In this paper house sales data from Rhode Island between 2000 and 2013 is analyzed to evaluate the effect of oyster farm construction on property values using a difference-in-difference (DiD) approach within a hedonic price model (HPM). Given the use of sales data this study focuses on the perceptions of people in the housing market. We found that the impacts are more nuanced and complex: overall on average the construction of oyster farms increased the value of the houses located closer to the farm. When the houses are grouped by their value category, however, our results show that the value of luxury houses decreased significantly.