Nicholas Irwin (Economics) and co-author David Wolf of Kobe University, Japan, recently published an article, "Time is Money: Water Quality's Impact on Home Liquidity and Property Values" in Ecological Economics. The paper explores home liquidity — how quickly a home sells after listing — in the context of environmental valuation, an oft-overlooked component of traditional hedonic analysis. Using novel data from the Chesapeake Bay, we find that improvements in water quality impact housing price in addition to liquidity, which provides meaningful monetary benefits for nearby homeowners. Failing to account for the accrual of benefits from the liquidity channel indicates water quality restoration projects and damages from environmental impairment will be otherwise undervalued.
