Quantifying Real Estate Externalities: Evidence on the Whole Foods Effect

Main Article Content

Kanis Saengchote


Real estate amenities can create both benefits and costs to local community, which economists call externalities. Quantification of externalities is challenging because of potential endogeneity problems that render simple statistical analyses inaccurate, necessitating the use of a more rigorous econometric technique. Exploiting store expansion activities of Whole Foods Market to infer the causal impact of the Whole Foods Effect using the difference-in-differences strategy, we find that property prices within 0.5 mile of a new Whole Foods Market store increase on average by 6.7% after a new store opens.

Article Details

How to Cite
Saengchote, K. (2020). Quantifying Real Estate Externalities: Evidence on the Whole Foods Effect. Nakhara : Journal of Environmental Design and Planning, 18, 37–46. https://doi.org/10.54028/NJ2020183746
Research Articles


Adelino, M., A. Schoar, & F. Severino (2015). House prices, collateral, and self-employment. Journal of Financial Economics 117(2), 288–306.

Agarwal, S., B. W. Ambrose, S. Chomsisengphet, & A. B. Sanders (2012). Thy neighbor’s mortgage: Does living in a subprime neighborhood affect one’s probability of default? Real Estate Economics 40(1), 1–22.

Bajari, P., J. C. Fruehwirth, K. I. Kim, & C. Timmins (2012). A rational expectations approach to hedonic price regressions with time-varying unobserved product attributes: The price of pollution. The American Economic Review 102(5), 1898–1926.

Basker, E. (2005a). Job creation or destruction? Labor market effects of Wal-Mart expansion. Review of Economics and Statistics 87(1), 174–183.

Basker, E. (2005b). Basker (2005b)Selling a cheaper mousetrap: Wal-Mart’s effect on retail prices. Journal of Urban Economics 58(2), 203–229.

Black, J., D. De Meza, & D. Jeffreys (1996). House prices, the supply of collateral and the enterprise economy. The Economic Journal, 60–75.

Borrescio-Higa, F. (2015). Can Walmart make us healthier? Prescription drug prices and health care utilization. Journal of Health Economics, 44, 37-53.

Courtemanche, C., Carden, A., Zhou, X., & Ndirangu, M. (2019). Do Walmart supercenters improve food security?. Applied Economic Perspectives and Policy, 41(2), 177-198.

Currie, J., L. Davis, M. Greenstone, & R. Walker (2013). Do housing prices reflect environmental health risks? evidence from more than 1600 toxic plant openings and closings. National Bureau of Economic Research Working Paper.

Fairlie, R. W. & H. A. Krashinsky (2012). Liquidity constraints, household wealth, and entrepreneurship revisited. Review of Income and Wealth 58(2), 279–306.Greenstone, M. and J. Gallagher (2008). Does hazardous waste matter? evidence from the housing market and the superfund program. The Quarterly Journal of Economics 123(3), 951–1003.Guiso, L., P. Sapienza, and L. Zingales (2013). The determinants of attitudes towards strategic default on mortgages. The Journal of Finance.

Hausman, J. & E. Leibtag (2007). Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart. Journal of Applied Econometrics 22(7), 1157–1177.

Immergluck, D., & Balan, T. (2018). Sustainable for whom? Green urban development, environmental gentrification, and the Atlanta Beltline. Urban Geography, 39(4), 546-562.

Johnson Garder (2007). An assessment of the marginal impact of urban amenities on residential pricing.

Karki, T. K. (2015). Mandatory Versus Incentive-Based State Zoning Reform Policiesfor Affordable Housing in the

United States: A Comparative Assessment. Housing Policy Debate, 25(2), 234-262.

Matsa, D. A. (2011). Competition and product quality in the supermarket industry. The Quarterly Journal of Economics 126(3), 1539–1591.

Mian & Sufi (2011) Mian, A. & A. Sufi (2011). House prices, home equity-based borrowing, and the US household

leverage crisis. The American Economic Review 101(5), 2132–56.

Neumark, D., J. Zhang, & S. Ciccarella (2008). The effects of Wal-Mart on local labor markets. Journal of Urban Economics 63(2), 405–430.

O’Sullivan, A. (2005). Gentrification and crime. Journal of Urban Economics, 57(1), 73-85.

Papachristos, A. V., Smith, C. M., Scherer, M. L., & Fugiero, M. A. (2011). More coffee, less crime? The relationship

between gentrification and neighborhood crime rates in Chicago, 1991 to 2005. City & Community, 10(3), 215-240.

Pope, D. G. & J. C. Pope (2015). When Walmart comes to town: Always low housing prices? Always? Journal of

Urban Economics 87, 1–13.

Robb, A. M. & D. T. Robinson (2014). The capital structure decisions of new firms. Review of Financial Studies 27(1), 153–179.

Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy 82(1), 34–55.

Rossi-Hansberg, E., P.-D. Sarte, & R. Owens III (2010). Housing externalities. Journal of Political Economy 118(3),

Slade, B. A. (2018). Big-Box Stores and Urban Land Prices: Friend or Foe?. Real Estate Economics, 46(1), 7-58.

Weller, S. & Van Hulten, A. (2012). Gentrification and displacement: the effects of a housing crisis on Melbourne’s

low-income residents. Urban Policy and Research, 30(1), 25-42.

Wolfe, S. E., & Pyrooz, D. C. (2014). Rolling back prices and raising crime rates? The Walmart effect on crime in the United States. British Journal of Criminology, 54(2), 199-221.