The Value of Piped Water and Sewers: Evidence from 19th Century Chicago
2021-11-10 16:03:00
We estimate the impact of piped water and sewers on property values in mid-19th century Chicago. The cost of sewers depends sensitively on imperceptible variation in grade and such variations in grade delayed water and sewer service to part of the city.  This delay provides quasi-random variation for causal estimates. We extrapolate ATE estimates from our natural experiment to the area treated with water and sewer service during 1874-1880 using a new estimator. Water and sewer access increases property values by a factor of 2.5. This exceeds costs by a factor of thirty.