Living with Hogs in Iowa: The Impact of Livestock Facilities on Rural Residential Property Values

Joseph A. Herriges, Silvia Secchi, Bruce A. Babcock
August 2003  [03-WP 342]

To better understand the magnitude of the effects of livestock feeding operations on residential property values, we constructed a new dataset that merges data on home sales with data on the location and size of livestock feeding operations in five rural counties of Iowa. We estimated a hedonic model to explain variations in residential sales price with standard house attributes, such as number of bedrooms and square feet of living space, as well as the effects of distance and density of livestock feeding operation. We find that livestock operations have an overall statistically significant effect on property values. Predicted negative effects are largest for properties that are downwind and close to livestock operations. In addition, feeding operations that are moderate in size have more impact than do large-scale operations, most likely reflecting age, type, and management practices of the moderate-sized operations. The limited size of the estimated effects suggest that common sense rules—such as not locating feeding operations close to and upwind of residences—combined with modest compensatory payments could help rural residences co-exist with modern feeding operations.

Keywords: hedonic model, livestock, property values.

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