Walmart stores aid home prices

Wal-Mart Stores Inc. promises “always low prices” at its 4,000 U.S. stores. That may not be the case for nearby homes, according to a study published by the National Bureau of Economic Research.

While the world’s largest retailer often runs into local opposition when opening a new store, those protesting may benefit: The price of houses located within 0.5 miles can rise by as much as 3% and by as much as 2% for homes a mile away, economists Devin Pope and Jaren Pope found.

The finding is based on a study of over 1 million housing transactions near 159 Wal-Mart outlets between 2000 and 2006. For the average priced home, the arrival of the company translates into about a $7,000 increase in price for the nearest homes, the economists said.

The research suggests a “preference by many households to live near a Wal-Mart and the stores that naturally agglomerate nearby,” the Pope brothers wrote. “On average the benefits to quick and easy access to the lower retail prices offered by Wal- Mart and shopping at these other stores appear to matter more to households than any increase in crime, traffic and congestion, noise and light pollution, or other negative externalities that would be capitalized into housing prices.”

The results should be useful to policy makers responsible for passing zoning regulations and other laws that influence Bentonville-based Wal-Mart’s ability to open new outlets, they said.

Devin Pope teaches at the University of Chicago and Jaren Pope at Brigham Young University.