Wal-Mart opponents have long claimed that the store lowers home values in the surrounding area. The argument is that the bright lights, traffic and pollution a Walmart brings hurts the neighbourhood.
But a new study published by the National Bureau of Economic Research shows that a Walmart in close vicinity can actually increase home values.
Devin Pope from the University of Chicago and Jaren Pope at Brigham Young University describe their study and results:
We use over one million housing transactions located near 159 Walmarts that opened between 2000 and 2006 to test if the opening of a Walmart does indeed lower housing prices. Using a difference-in-differences specification, our estimates suggest that a new Walmart store actually increases housing prices by between 2 and 3 per cent for houses located within 0.5 miles of the store and by 1 to 2 per cent for houses located between 0.5 and 1 mile.
The researchers found that the Walmart acted as a community hub and people will pay for the convenience of having one nearby.
Here’s a graph showing that home sales went up after construction of a Walmart.