"Impact of Large-scale Solar on Property Values in the US: Diverse Effects and Causal Mechanisms"

Chenyang Hu, Zhenshan Chen, Pengfei Liu, Wei Zhang, Xi He, and Darrell Bosch.  Proceedings of the National Academy of Sciences 122 (24), (2025). Preprint Appendices Publication Link  

Abstract As the renewable energy transition continues into less receptive communities, local opposition is expected to intensify, potentially slowing the process. Since the local impacts are neither well quantified nor widely recognized, we lack policies and common practices to mitigate the potential associated welfare loss in affected communities. Based on a nationwide dataset combining property transactions and large-scale solar photovoltaic (LSSPV) sites, we analyze the heterogeneous effects of LSSPV on property prices and the associated causal pathways. Difference-in-differences estimates show that LSSPV significantly increases agricultural or vacant land value by about 19.4% within a 2-mile radius, while simultaneously reducing residential property values within 3 miles by about 4.8%. The estimated average negative impact on home values is primarily driven by site proximity and diminishes with both distance and time. Effect estimates are more robust to alternative specifications when proximity pairs with visibility rather than invisibility, but no evidence suggests visibility significantly amplifies the proximity effect. Heterogeneous effect estimates indicate that high solar lease potential, being in heavily Democratic-leaning counties, and brownfield redevelopment largely mitigate the negative residential value impact. The analysis reveals no significant heterogeneity across a few factors, including varying site visibility, directional orientation of properties relative to the LSSPV site, and different tracking systems. Evidence indicates that the negative impact on residential values might mainly stem from negative perceptions, but channels through physical conditions cannot be entirely dismissed. Our assessment provides benchmark information for local externality mitigation plans, potentially reducing community opposition and expediting the renewable energy transition.

"Heterogeneous Flood Zone Effects on Coastal Housing Prices  - Risk Signal and Mandatory Costs" 

Zhenshan Chen, Charles Towe, and Xi He. Journal of Environmental Economics and Management (2025): 103153.  Paper Appendices Publication Link 

Abstract Using a high-quality dataset and addressing various empirical challenges, we estimate the heterogeneous impact of flood zone on single-family housing prices in coastal Connecticut. Causal forest estimates suggest that transactions without a mortgage loan, where flood insurance is voluntary, show an insignificantly positive average flood zone effect. Conversely, with mandatory and upfront insurance costs, with-loan transactions exhibit a statistically significant average discount of $12.2k. To detect the nuanced risk signals associated with the flood zone designation and mandatory costs, we conceptualize and empirically test differences in distributions of heterogeneous flood zone effects between transactions with and without mortgage. Bootstrap tests reveal that, compared with the no-loan counterpart, the with-loan heterogenous effect has a significantly lower average, is first-order stochastically dominated, has a significantly lower dispersion, and is significantly more concentrated below a reference point indicated by the insurance costs. Robust evidence suggests that most transactions feature minimal flood zone discounts, if any, suggesting neither the flood zone designation nor the mandatory flood insurance conveys a sufficiently strong message about rising flood risks. Despite heightened risk perceptions from recent hurricanes and policies, stronger flood risk signaling is needed in coastal Connecticut.

"The Value of Oyster Reef Restoration" 

Daniel Petrolia, Freedom Enyetornye, Zhenshan Chen, and Seong Yun. Marine Resource Economics 40.1 (2025). Paper and Appendices  Publication Link 

Abstract We analyze public preferences for oyster reef restoration, focusing on the U.S. Gulf Coast, one of the leading oyster-producing regions in the U.S.  We administer a contingent-valuation survey to 4,690 households across the region using a web survey instrument employing videos to convey key information and follow-up questions to mitigate hypothetical bias. We test for status quo and scope effects, and compare a restricted sample of “high-quality” responses that are internally consistent against the full sample. We provide estimates of both household and aggregate willingness to pay and place these in the context on ongoing oyster restoration efforts and commercial landings. Results indicate that public support for oyster restoration, in terms of willingness to pay, exceeds current restoration expenditures and is consistent with the current market value of oysters.  We also find that preferences are driven strongly by those who eat oysters as well as those who are saltwater anglers. 

"Revealed Preferences from Voluntary Contributions" 

Zhenshan Chen and Stephen Swallow. Journal of the Association of Environmental and Resource Economists 11.4 (2024). Paper  Appendices Publication Link

Abstract We propose a method for recovering the compensating variation for a public good based on donation data. People face a take-it-or-leave-it actual donation decision, and the public good is provided if a threshold contribution level is reached. Compensating variation is derived using an expected utility model that accounts for nonparticipation, free riding, and warm glow, and a double-hurdle model is used to recover estimates of structural parameters. Monte Carlo simulations suggest the approach reliably recovers willingness to pay measures with moderate bias, and this bias is reduced when donations are combined with data on the donors’ subjective probabilities that the threshold will be reached. We illustrate the methodology through an empirical application involving the protection of grassland bird habitats.

"Pricing Coastal Amenities and Flood Hazards"  

Zhenshan Chen and Charles Towe. Land Economics 99.3 (2023). Publication Link

Abstract Coastlines bring a basket of precious amenities to residents but also have significant and growing risks from storms and rising sea levels. Disentangling these amenities and risks is of ever increasing importance to the public and policymakers. Evaluating the most tangible aspect of coastal living in New England, we present a scalable way to construct parcel-specific measures of coastal amenities. Estimates suggest that good coastal amenities, represented by unobstructed ocean views, add about 33% to 69% to property prices. Coastal hazard effects are separated from the amenities: the flood zone discounts in coastal Connecticut and Massachusetts are generally low.

"Recreational Home Owners’ Impact on Agricultural Land Use"  

Charles Towe and Zhenshan Chen. Land Economics 99.1 (2023). Paper Publication Link

Abstract When non-residents purchase agricultural properties, the land use decision can make farmland operate well below potential, still allowing for tax credits. We empirically investigate how non- resident ownership affects the agricultural land-use decisions in upstate New York. A difference-in-difference matching approach shows a causal link between purchases by non-residents and a loss of 11% of acreage to a lower-productivity use. A rough generalization shows this conversion counts for one-seventh of the decreased agricultural land in intensive uses in similar counties. Perhaps a simple opportunistic use of the unbinding tax-credit criteria, this phenomenon contradicts the policy’s objective and might impose other consequences on rural communities.

"Weather, Cropland Expansion, and Deforestation in Ethiopia" 

Xi He and Zhenshan Chen. Journal of Environmental Economics and Management, Volume 77 (2022).  Paper Publication Link

Abstract We use high-resolution weather data and rich Ethiopian household and plot level data in 2011/12, 2013/14, and 2015/16 growing seasons to investigate the impact of weather shocks on agricultural producers’ cropland expansion and land conversion behaviors. We find that weather above 32 degrees Celsius is harmful to crop growth. Household-level analysis shows that each additional average harmful growing degree day (defined as temperature above 32 degrees Celsius) leads to a 17.2%, 20.1%, and 20.0% increase in total land holdings, cropland, and cropland allocated to cereal production, respectively. Each additional average harmful growing degree day reduces households’ forest by 24.7% for households with some forest in the baseline growing season. Further analysis shows that farmers’ cropland expansion substitutes migration and off-farm employment. The significant impacts of weather shocks on cropland expansion are only significant for households with relatively fewer assets but not for households with more assets, which suggests that only households without enough resources would expand cropland. These findings highlight the need to identify and facilitate coping/adaptation strategies that are sustainable in the long run.

"The Influence of Projected Outcomes on Preferences over Alternative Regulations: Evidence from a Recreational Fishery" 

Zhenshan Chen, Pengfei Liu, Eric Schultz, and Jacob Kasper, Stephen Swallow. Land Economics 98.4 (2022). Paper  Appendices  Publication Link

Abstract The expected outcomes arising from alternative policies on respondent choice have not been sufficiently accounted for in stated preference studies. We accordingly develop a framework to quantitatively assess the influence of outcome provision and illustrate with a choice experiment in a recreational fishery. The application suggests that participants are more likely to choose status quo and low-cost options when outcomes are not provided, and these conservative behaviors might reflect the higher dispersion in anglers’ utility in Tautog fishing. Further investigations with latent class models suggest that the outcome provision makes a significant share of respondents change their choice pattern. 

"Nonparticipation and Heterogeneity in Stated Preferences: A Double Hurdle Latent Class Approach for Climate Change Adaptation Plans and Ecosystem Services" 

Zhenshan Chen, Stephen Swallow and Ian Yue, Environmental and Resource Economics, Volumn 77, 35–67 (2020). Paper, Appendices 

Abstract We introduce a double hurdle latent class approach to model choice experiments, where serial non-participants and clustered preference patterns are present. The proposed approach is applied to a recent stated preference study in which the residents of the Eastern Shore of Virginia answer choice questions about alternative coastal climate change adaptation plans. While the double hurdle latent class model avoids self-contradictory assumptions, estimates and tests show that, compared with an unrestricted latent class model, it achieves a significantly better statistical fit and maintains the capability to link the heterogeneity of participants’ preferences to their attributes. Moreover, the double hurdle latent class model also provides important implications in how to conduct welfare analysis based on different behavioral patterns of different groups, which leads to nontrivial changes in welfare measures. The empirical results highlight that certain ecosystem services may increase the willingness to pay for coastal climate change adaptation plans.