The Potential Impact Radius of a Natural Gas Transmission Line and Real Estate Valuations: A Behavioral Analysis

Charles M Hilterbrand
Muma Business Review  •  Volume 4  •  2020  •  pp. 087-089
This study intended to address the question, “How would a purchase price be impacted if a seller provided buyers a notice that the residential property that has been listed for sale is located within a Potential Impact Radius (PIR) of a natural gas transmission line?” Does the notice of the location affect the purchase value a buyer is willing to offer for a residential property? Does the perceived risk associated with PIR affect the amount a potential buyer would offer?
To address these questions, a Qualtrics survey that included three video tour treatments of a residential property was sent to three groups. A control group was presented a video tour without any residential disclosure notice. A second group was presented a video tour with an audible notice that the residence is located within 500 feet of a natural gas transmission line. A third group was presented a video tour with an audible notice that the residence is located within the potential impact radius (PIR) of a natural gas transmission line.
Each respondent was asked to state a fair offer value for the residential property shown in their respective video. No statistically significant difference was found in the fair offer value mean between the control group and the group with notice the residence is located within 500 feet of a natural gas transmission line was found. No statistically significant difference was found in the fair market value between the group with notice the residence is located within 500 feet of a natural gas transmission line and the group with notice the residence is located within the potential impact radius (PIR) of a natural gas transmission line was found. A statistical significance was found where the control group was compared to the group with notice the residence is located within the potential impact radius (PIR).
Easement, Right of Way, Pipeline, Land Use, Disclosure, High Consequence Area
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