Walmart is many things to many people – discount chain, multinational corporation, grocery store, and, of course, arbiter of pollution, low-wage jobs and traffic.
But a new study from a duo of economists has put a new, interesting perspective on Walmart’s impact on local economies – its positive effect on home values.
“The results surprised us a bit,” said Devin G. Pope of the University of Chicago, one of the study’s authors. “[When we began researching], we were a bit agnostic on it.”
Conducted with his brother, Jaren C. Pope of Brigham Young University, Devin said the study was an attempt to consolidate all of the disparate elements involving a Walmart’s construction – so the traffic, the pollution, the low wages, the competitive prices, the impact on local businesses – through one of the more universal elements of prosperity: housing prices.
To accomplish that, the brothers analyzed more than one million housing transactions located near 159 Walmart stores that opened between 2000 and 2006, and they found that for homes located between 0.5 miles and one mile of newly-constructed Walmart stores, the store’s construction boosted home prices by 2-3 percent.
The farther the homes were from the Walmart, Devin said, the lesser the impact on prices, and the reason for that diminishment, he explained, tied in with reason for the initial increase. People who purchase housing near a Walmart are doing so for the convenience. They understand the industry-defying deals that Walmart is able to secure, and they want to capitalize on those deals in as simple a manner as possible; thus, residences located near the Walmart attain a premium.
Devin also said that he and his brother did consider greater pricing trends when computing their data, chief among them how national home values were rising from 2000 to 2006 and the unique pricing trends of the areas surrounding the Walmart stores. Their study’s findings, Pope said, were not impacted by those factors.
So what do you make of this? Do you find clients, especially those outside of the influence of Walmart, want to capitalize on the store’s low prices, and pursue homes near the stores? And do home prices respond accordingly?