Capitalization of high-exposure risk events: long-term effects of natural gas pipeline incidents on US property values

Purpose With the boom of shale oil and gas in the USA as the context, the quick expansion of pipeline networks has garnered public concern regarding the economic consequences of pipeline failures. Design/methodology/approach The survey examined 426 gas pipeline accidents in the USA from 2010 to 2020 and examined their impact on housing prices. Findings It was found that only a very serious accident on the ground pipeline (for example, an explosion, a fire and someone else was injured, which we called a “high exposure events”), reduce the price of a neighboring house, and other types of accidents did not cause any major changes in housing prices. Further analysis also showed that high exposure events would reduce housing prices within 1 billion meters of the pipeline by 8.2%, and this poor effect lasted an average of about 8 years. Originality/value In addition, we found that at the beginning of the business, the volume of the real estate transaction fell slightly, which shows that the power side of demand responds quickly to such things. Compared to the apparent impact of the pipeline accident, the impact of the pipeline installation on housing prices is not great, and statistically little meaning. The study also showed that different types of things are very different, so it is impossible to summarize all the situations with the results of the same thing.