Ruhr Economic Papers

Ruhr Economic Papers #791

Local Cost for Global Benefit: The Case of Wind Turbines

by Manuel Frondel, Gerhard Kussel, Stephan Sommer and Colin Vance

RWI, RUB, 01/2019, 22 S./p., 8 Euro, ISBN 978-3-86788-919-3 DOI: 10.4419/86788919



Given the rapid expansion of wind power capacities in Germany, this paper estimates
the effects of wind turbines on house prices using real estate price data from Germany’s
leading online broker. Employing a hedonic price model whose specification is informed
by machine learning techniques, our methodological approach provides insights into
the sources of heterogeneity in treatment effects. We estimate an average treatment
effect (ATE) of up to -7.1% for houses within a one-kilometer radius of a wind turbine,
an effect that fades to zero at a distance of 8 to 9 km. Old houses and those in rural
areas are affected the most, while home prices in urban areas are hardly affected.
These results highlight that substantial local externalities are associated with wind
power plants.

JEL-Classification: Q21, D12, R31

Keywords: Wind power; hedonic price model