U-M Economics Alumnus Evan Herrnstadt (PhD ’17) published “What Lies Beneath: Pipeline Awareness and Aversion” as part of the National Bureau of Economic Research working paper series. Herrnstadt and co-author, Richard L. Sweeney (Boston College), examine the public’s awareness level of current pipelines and their seeming aversion to the addition of new ones to determine why there has been increased level of opposition.

What Lies Beneath: Pipeline Awareness and Aversion

Abstract

Stated safety concerns are a major impediment to making necessary expansions to the natural gas pipeline network. While revealed willingness to pay to avoid existing natural gas pipelines appears small, it is difficult to know if this reflects true ambivalence or a lack of salience and awareness. In this paper, we test this latter hypothesis by studying how house prices responded to a deadly 2010 pipeline explosion in San Bruno, CA, which shocked both attention and information. Using multiple identification strategies, we fail to find any evidence of a meaningful shift in the hedonic price gradient around pipelines following these events. We conclude with a discussion of how this result relates to latent, fully informed preferences, as well as the implications for future pipeline expansions.

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