A new four-year study conducted by two professors of agricultural and environmental economics shows that in at least one rural Pennsylvania county, open space within 400 meters of a house has the most positive impact on house prices, followed by single-family homes on large lots. A landfill within the same distance has the most negative effect.

Dr. Richard Ready and Dr. Charles Abdalla, who are affiliated with Penn State University, conducted the land-use study in Berks County, Pa., using data based on 8,090 single-family homes sold between 1998 and 2002. They looked at how prices were affected by both amenities (those were good things such as open space and proximity to shopping) and "disamenities" (those were the not-so-good things such as industrial use and animal farms).

"Our original interest was in the impact of open space on residents and property values," says Ready. "One of the concerns is that the lack of open space will make places a less desirable place to live. One way we can try to measure how desirable something like that is is to measure property values."

Because much of Berks County is primarily agricultural, Ready and Abdalla also looked at the impact large-scale animal facilities has on property values. Surprisingly, these large-scale animal facilities, defined as having more than 200 animal equivalent units (aeu), have less of an impact on property values than a landfill. It doesn't matter whether those animals are pigs, chickens, or dairy cattle.

"A farm with 200 aeu's, that's about 200 milking cows with calves," Ready explains, adding that Berks County has a real mix of animal farms. "That's not a really big animal operation, especially compared to some of the stuff that's going on in North Carolina."

Learn more about markets featured in this article: Reading, PA.