<scp>EPA</scp> Enforcement Actions and Property Prices

ABSTRACT This study examines the effects of Environmental Protection Agency (EPA) enforcement actions on property prices in the United States. Using data on EPA enforcement cases, we assess how investors and homeowners react to regulatory actions to curb environmental violations. Our analysis reveals that residential properties in proximity to EPA enforcement sites experience a significant short‐term decline in value, with more pronounced effects for enforcement cases related to hazardous waste and for properties located closer to the enforcement sites. However, the price reversal 3 months post‐enforcement suggests that market overreaction plays a role in the initial decline. Our findings underscore the importance of environmental regulation enforcement in shaping real estate market dynamics, highlighting the economic impact of environmental pollution and regulatory measures on local property values.