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Abstract

We were asked by the Legislature to conduct "research into the effects feedlots have on the value of nearby property." To do so, we carried out a statistical examination of the interrelationships among residential property sales prices and nearby feedlots in a southwestern Minnesota study area. Structure and location data for 292 residential property sales in Redwood and Renville Counties, excluding the cities of Olivia and Redwood Falls, were linked to the location and physical characteristics of every larger feedlot within three miles of each sale. The basic approach was to ask, "Does the addition of information about feedlot proximity help us explain observed house prices beyond the explanatory power of statistical models that use only the house's structure and other location characteristics?" We examined this overall question with respect to a series of constructed proximity indicators that capture the effects of feedlot size, direction, distance, and types of animals, among others. We found statistically significant evidence of a link between feedlot location and house prices in the study area. That relationship was positive in sign, not negative as initially expected. Houses closer to feedlots appear to have sold for more than expected from knowledge of the characteristics of the houses alone. The effect was most pronounced for houses that are older, relatively lower in price, or located in small towns.

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