Walmart Stores Push Nearby Home Prices Up, Economists Find
(NEW YORK) -- Walmart, the nation's largest private employer, has been chastised for skimping on workers' wages and health care perks, but critics now may have a silver lining as the giant retailer positivelty affects housing prices.
An economics research paper from the University of Chicago and Brigham Young University found that the presence of a Walmart led to the increase of housing prices by 2 to 3 percent on average for homes within 0.5 miles of the store. For houses located between 0.5 and 1 mile of the store, prices increased 1 to 2 percent.
The researchers analyzed 159 stores that opened between 2000 and 2006 that had available housing price data, and compared home prices 2.5 years before and after the Walmart opened.
Devin Pope, an economics professor at the University of Chicago Booth School of Business, who wrote the paper along with his brother, Jaren Pope, an economics professor at Brigham Young University, said many people have written about the positive and negative outcomes of Walmart stores, which number more than 4,400 in the U.S., including Sam's Club warehouses. Walmart has 10,130 retail units in 27 countries, according to the company website.
The study looked at stores in 20 states, all with varying numbers of stores. California had the most stores analyzed at 36, while Florida had the second largest number at 21. Six states, including Tennessee and Wisconsin, had only one store analyzed.
Devin Pope said housing prices may provide some picture that shows the net impact of a Walmart store on a neighborhood.
"When you see housing prices increase and a change in an environmental amenity, there is a group of people happy with that amenity," he said.
Devin Pope said the analysis controlled for other factors that may have led to the price increases, such as national housing trends. The paper does not explain how home prices changed in each city because the analysis was conducted at the aggregate level to control for national trends.
Devin Pope said the paper did not research trends past 2.5 years after the Walmart was built, but it is possible prices would increase further.
However, he said, he would be surprised if home prices did not decrease in some of the 159 communities he studied as a result of the Walmart.
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