Effect of the Norfolk Southern Train Derailment on House Prices in East Palestine, OH

In February 2023, a Norfolk Southern (NS) train derailed in East Palestine Ohio. Several rail cars crashed off the tracks, releasing hazardous chemicals into two local creeks. Two days later, after calling for an evacuation of homes within one mile, the railroad performed a controlled burn-off of the chemicals, releasing a toxic plume spanning miles in multiple directions. We evaluate the effect of these events on house prices. For this case we conducted both a hedonic regression analysis and contingent valuation (CV) analysis. The regression analysis included over 3,000 house sales from 2018 to 2024, of which 98 sales took place in the Value Assurance Program (VAP) area soon after the chemical burn-off. Our CV looked at five different fact patterns with over 1,000 online survey responses. Overall, we found that residential sales prices in the VAP were down approximately 14% after the release event, compared with control properties. Additionally, results showed that impacted properties remained approximately 25% longer on the market than the control homes; this paper is among the first to show that days on market are impacted by a contamination event.