Pub Date : 2024-12-07DOI: 10.1016/j.jhe.2024.102039
Tianyun Zhu
I propose a novel approach which yields a likelihood-based estimator for the implicit price elasticity of demand for avoiding air pollution exposure. Applying my approach to a cross-sectional hedonic data set of Cleveland MSA, I find that the estimate on the implicit price elasticity of interest is approximately 0.03, smaller in magnitude than the national estimates obtained by prior studies. Beyond estimating the implicit price elasticity of demand for avoiding air pollution, my approach also allows for nonparametric characterization of the sorting equilibrium and full recovery of the bid function for each household type that sorts into an observed air quality level, which makes it possible to implement counterfactural welfare analysis of a non-marginal change in air quality.
{"title":"Estimating the implicit price elasticity of the demand for air quality: A hedonic approach","authors":"Tianyun Zhu","doi":"10.1016/j.jhe.2024.102039","DOIUrl":"10.1016/j.jhe.2024.102039","url":null,"abstract":"<div><div>I propose a novel approach which yields a likelihood-based estimator for the implicit price elasticity of demand for avoiding air pollution exposure. Applying my approach to a cross-sectional hedonic data set of Cleveland MSA, I find that the estimate on the implicit price elasticity of interest is approximately 0.03, smaller in magnitude than the national estimates obtained by prior studies. Beyond estimating the implicit price elasticity of demand for avoiding air pollution, my approach also allows for nonparametric characterization of the sorting equilibrium and full recovery of the bid function for each household type that sorts into an observed air quality level, which makes it possible to implement counterfactural welfare analysis of a non-marginal change in air quality.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"67 ","pages":"Article 102039"},"PeriodicalIF":1.4,"publicationDate":"2024-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143176596","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rising temperature and climate change impact individual and household economic decisions. While an established body of literature has examined the effects of temperature shocks on different outcomes, there is limited evidence on the relationship between temperature shocks and homeownership. We contribute to the literature by presenting evidence on the impact of temperature shocks on homeownership in Australia. We use longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and satellite re-analysis temperature data over the period 2001 to 2019, and apply a fixed effect approach that addresses unobserved heterogeneity. We find that an increase in temperature shocks is associated with a decline in the probability of owning a home. We find this relationship to be more pronounced in urban than rural areas, and among individuals with a bachelor's degree. We also find the relationship to be persistent in recent years. Additionally, we find neighbourhood crime, social capital, neighbourhood satisfaction, life satisfaction and house prices to mediate the relationship between temperature shocks and homeownership.
{"title":"Burning the Australian dream: Temperature shocks and homeownership in Australia","authors":"Akwasi Ampofo , Sefa Awaworyi Churchill , Kingsley Baako , Godwin Kavaarpuo","doi":"10.1016/j.jhe.2024.102031","DOIUrl":"10.1016/j.jhe.2024.102031","url":null,"abstract":"<div><div>Rising temperature and climate change impact individual and household economic decisions. While an established body of literature has examined the effects of temperature shocks on different outcomes, there is limited evidence on the relationship between temperature shocks and homeownership. We contribute to the literature by presenting evidence on the impact of temperature shocks on homeownership in Australia. We use longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and satellite re-analysis temperature data over the period 2001 to 2019, and apply a fixed effect approach that addresses unobserved heterogeneity. We find that an increase in temperature shocks is associated with a decline in the probability of owning a home. We find this relationship to be more pronounced in urban than rural areas, and among individuals with a bachelor's degree. We also find the relationship to be persistent in recent years. Additionally, we find neighbourhood crime, social capital, neighbourhood satisfaction, life satisfaction and house prices to mediate the relationship between temperature shocks and homeownership.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"67 ","pages":"Article 102031"},"PeriodicalIF":1.4,"publicationDate":"2024-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143176597","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-19DOI: 10.1016/j.jhe.2024.102028
Dennis Guignet , O. Ashton Morgan , Craig E. Landry , John C. Whitehead , William P. Anderson Jr
Sea-level rise poses a growing threat to coastal communities and economies across the globe. North Carolina (NC) is no exception, with coastal communities facing annual sea-level rise rates of 2.01 to 4.55 mm/year (NOAA, 2018). Sea-level rise can affect key ecosystem services to coastal communities, including the provision of clean drinking water and adequate wastewater treatment. We examine how increases in the cost of these services and possible negative effects on coastal house prices due to sea-level rise impact homeowners’ decisions to remain in their current home or sell. Administering a stated preference survey to NC homeowners in counties adjacent to the coast, we assess how households might respond to increasing costs due to sea-level rise. We present a novel framework to estimate expected welfare impacts under illustrative scenarios, and examine heterogeneity in responses and welfare effects with respect to place attachment. Our analysis can help inform local communities and benefit-cost analyses of future adaptation strategies and infrastructure investments.
{"title":"Sea-level rise, groundwater quality, and the impacts on coastal homeowners’ decisions to sell","authors":"Dennis Guignet , O. Ashton Morgan , Craig E. Landry , John C. Whitehead , William P. Anderson Jr","doi":"10.1016/j.jhe.2024.102028","DOIUrl":"10.1016/j.jhe.2024.102028","url":null,"abstract":"<div><div>Sea-level rise poses a growing threat to coastal communities and economies across the globe. North Carolina (NC) is no exception, with coastal communities facing annual sea-level rise rates of 2.01 to 4.55 mm/year (NOAA, 2018). Sea-level rise can affect key ecosystem services to coastal communities, including the provision of clean drinking water and adequate wastewater treatment. We examine how increases in the cost of these services and possible negative effects on coastal house prices due to sea-level rise impact homeowners’ decisions to remain in their current home or sell. Administering a stated preference survey to NC homeowners in counties adjacent to the coast, we assess how households might respond to increasing costs due to sea-level rise. We present a novel framework to estimate expected welfare impacts under illustrative scenarios, and examine heterogeneity in responses and welfare effects with respect to place attachment. Our analysis can help inform local communities and benefit-cost analyses of future adaptation strategies and infrastructure investments.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102028"},"PeriodicalIF":1.4,"publicationDate":"2024-11-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142699381","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-24DOI: 10.1016/j.jhe.2024.102022
Patricia Menéndez , Maria Jesús Bárcena , María Cristina González , Fernando Tusell
We analyze property prices, including both sales and rents, in relation to climate change-associated flood risk arising from sea level rise and river overflow. Our body of evidence consists of sale and rent offered prices in the Basque Country from 2007 to 2017, totaling over 329,000 observations. Our quantitative methods depart from those in other studies by using the ratio of sale to rent prices, deemed more likely to reflect the effects we are investigating. We use geographically weighted regression (GWR) with neighborhoods tailored to risk areas. Our findings provide some evidence of risk capitalization, although limited to areas of higher risk.
{"title":"The effect of flood risk on house prices in the Basque Country","authors":"Patricia Menéndez , Maria Jesús Bárcena , María Cristina González , Fernando Tusell","doi":"10.1016/j.jhe.2024.102022","DOIUrl":"10.1016/j.jhe.2024.102022","url":null,"abstract":"<div><div>We analyze property prices, including both sales and rents, in relation to climate change-associated flood risk arising from sea level rise and river overflow. Our body of evidence consists of sale and rent offered prices in the Basque Country from 2007 to 2017, totaling over 329,000 observations. Our quantitative methods depart from those in other studies by using the ratio of sale to rent prices, deemed more likely to reflect the effects we are investigating. We use geographically weighted regression (GWR) with neighborhoods tailored to risk areas. Our findings provide some evidence of risk capitalization, although limited to areas of higher risk.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102022"},"PeriodicalIF":1.4,"publicationDate":"2024-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142526182","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-24DOI: 10.1016/j.jhe.2024.102030
Doris Weichselbaumer, Hermann Riess
This study investigates the previously unexplored effect that immigrant generation has on housing discrimination against immigrants. Property owners may perceive more recent immigrants as particularly “other” and fear that they will not be good tenants, e.g. because they will treat a property in an undesirable manner or not pay their bills. To test the effect of acculturation, we conduct an email correspondence test in Austria and compare landlords’ responses to inquiries from immigrants (with a Serbian, Syrian or Turkish name) of the first, first and a half, and second-generation to those who do not provide respective information about their immigration background. We find that when applicants indicate their place of birth and upbringing, discrimination is highest for first-generation immigrants and lowest for second-generation immigrants. This suggests an advantage for more acculturated applicants. However, compared to providing no information, actively signaling a second-generation background only benefits one of the immigrant groups tested (Syrians), who may be perceived as recent refugees otherwise.
{"title":"Discrimination in the Austrian rental housing market: The effect of information concerning first and second-generation immigrant status","authors":"Doris Weichselbaumer, Hermann Riess","doi":"10.1016/j.jhe.2024.102030","DOIUrl":"10.1016/j.jhe.2024.102030","url":null,"abstract":"<div><div>This study investigates the previously unexplored effect that immigrant generation has on housing discrimination against immigrants. Property owners may perceive more recent immigrants as particularly “other” and fear that they will not be good tenants, e.g. because they will treat a property in an undesirable manner or not pay their bills. To test the effect of acculturation, we conduct an email correspondence test in Austria and compare landlords’ responses to inquiries from immigrants (with a Serbian, Syrian or Turkish name) of the first, first and a half, and second-generation to those who do not provide respective information about their immigration background. We find that when applicants indicate their place of birth and upbringing, discrimination is highest for first-generation immigrants and lowest for second-generation immigrants. This suggests an advantage for more acculturated applicants. However, compared to providing no information, actively signaling a second-generation background only benefits one of the immigrant groups tested (Syrians), who may be perceived as recent refugees otherwise.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102030"},"PeriodicalIF":1.4,"publicationDate":"2024-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142571774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-16DOI: 10.1016/j.jhe.2024.102029
Jianglong Li, Shiqiang Sun
Economists often reply on housing market to investigate the willingness to pay for clean air, while potential endogeneity concerns pose challenges. This paper proposes an identification strategy based on the Gobi Desert dust storm, providing suitable instrumental variable for hedonic models at the house-day level in East Asia. We exploit within-Beijing and over-time variation in air pollution caused by dust storm and find that after addressing endogeneity issues, the negative impact of air pollution on housing prices strengthened nearly fivefold. Buyers in Beijing are willing to pay an additional 7.9 % in housing prices for a decrease of PM10 by 100 μg/m³, indicating that the benefits of air pollution improvement in Beijing over the past decade are >1.5 trillion yuan in the housing market. This paper also reveals that an increase in air pollution leads sellers to exhibit a higher willingness to sell, reflecting in lower listing prices, heightened bargaining power for buyers, and a shorter transaction cycle.
{"title":"Gobi wind blows housing price away: Willingness to pay for clean air in China","authors":"Jianglong Li, Shiqiang Sun","doi":"10.1016/j.jhe.2024.102029","DOIUrl":"10.1016/j.jhe.2024.102029","url":null,"abstract":"<div><div>Economists often reply on housing market to investigate the willingness to pay for clean air, while potential endogeneity concerns pose challenges. This paper proposes an identification strategy based on the Gobi Desert dust storm, providing suitable instrumental variable for hedonic models at the house-day level in East Asia. We exploit within-Beijing and over-time variation in air pollution caused by dust storm and find that after addressing endogeneity issues, the negative impact of air pollution on housing prices strengthened nearly fivefold. Buyers in Beijing are willing to pay an additional 7.9 % in housing prices for a decrease of PM<sub>10</sub> by 100 μg/m³, indicating that the benefits of air pollution improvement in Beijing over the past decade are >1.5 trillion yuan in the housing market. This paper also reveals that an increase in air pollution leads sellers to exhibit a higher willingness to sell, reflecting in lower listing prices, heightened bargaining power for buyers, and a shorter transaction cycle.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102029"},"PeriodicalIF":1.4,"publicationDate":"2024-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554247","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-09DOI: 10.1016/j.jhe.2024.102027
Alexandros Skouralis, Nicole Lux, Mark Andrew
One in six properties in England is exposed to flood risk and around half of those affected properties can be characterised as high risk. In this paper we examine whether the probability of flooding is capitalised in England's property market prices. We use unique property-level data from Rightmove, UK's no.1 property website and the property-level by Twinn, Royal HaskoningDHV. The latter is a metric of objective flood risk based on the likelihood of an individual property being flooded due to rainfall, overflowing rivers and tidal surges and is commonly used by UK lenders. By comparing the unconditional averages of our data, we find that properties at risk are sold at an 8.14 % discount compared to non-exposed properties, and the price discount increases to 32.2 % for properties with very high flood risk. By 2080 the flood events are expected to become more frequent and the average flood risk is projected to increase by 8 %. Our empirical model suggests that one percentage point increase in properties' flood risk is associated with a decline of 0.07 % to 0.11 % in both sold and asking property prices. The impact is higher for properties of which flood risk is expected to increase or for regions that have recently experienced a flood event.
{"title":"Does flood risk affect property prices? Evidence from a property-level flood score","authors":"Alexandros Skouralis, Nicole Lux, Mark Andrew","doi":"10.1016/j.jhe.2024.102027","DOIUrl":"10.1016/j.jhe.2024.102027","url":null,"abstract":"<div><div>One in six properties in England is exposed to flood risk and around half of those affected properties can be characterised as high risk. In this paper we examine whether the probability of flooding is capitalised in England's property market prices. We use unique property-level data from Rightmove, UK's no.1 property website and the property-level <span><math><mrow><mi>F</mi><mi>l</mi><mi>o</mi><mi>o</mi><mi>d</mi><mi>S</mi><mi>c</mi><mi>o</mi><mi>r</mi><msup><mrow><mi>e</mi></mrow><mrow><mi>T</mi><mi>M</mi><mspace></mspace></mrow></msup></mrow></math></span>by Twinn, Royal HaskoningDHV. The latter is a metric of objective flood risk based on the likelihood of an individual property being flooded due to rainfall, overflowing rivers and tidal surges and is commonly used by UK lenders. By comparing the unconditional averages of our data, we find that properties at risk are sold at an 8.14 % discount compared to non-exposed properties, and the price discount increases to 32.2 % for properties with very high flood risk. By 2080 the flood events are expected to become more frequent and the average flood risk is projected to increase by 8 %. Our empirical model suggests that one percentage point increase in properties' flood risk is associated with a decline of 0.07 % to 0.11 % in both sold and asking property prices. The impact is higher for properties of which flood risk is expected to increase or for regions that have recently experienced a flood event.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102027"},"PeriodicalIF":1.4,"publicationDate":"2024-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142445637","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-01DOI: 10.1016/j.jhe.2024.102023
Hannah Hennighausen , Alexander James
Millions of people are displaced by natural disasters each year, yet little is known about how evacuees affect host communities. We analyze the migratory effects of the most destructive fire in California history, the 2018 Camp Fire, which destroyed over 18,000 structures and displaced roughly 50,000 people. By merging geospatial information on the fire’s footprint with Zillow’s housing transaction data, we estimate both the spatial and temporal effects of the fire on real estate prices at a granular level. A number of important insights emerge. First, within 25 miles of the fire’s footprint, home prices increased by 13 percent in the six-week aftermath of the fire. Effects decay with distance and are statistically insignificant beyond 100 miles. Second, effects are detected within two weeks of the fire, fully materialize within four weeks, and are persistent up to ten months (which exhausts our period of consideration). Results are consistent with the relocation decisions of evacuees and are robust to a variety of specifications and modeling assumptions.
{"title":"Catastrophic fires, human displacement, and real estate prices in California","authors":"Hannah Hennighausen , Alexander James","doi":"10.1016/j.jhe.2024.102023","DOIUrl":"10.1016/j.jhe.2024.102023","url":null,"abstract":"<div><div>Millions of people are displaced by natural disasters each year, yet little is known about how evacuees affect host communities. We analyze the migratory effects of the most destructive fire in California history, the 2018 Camp Fire, which destroyed over 18,000 structures and displaced roughly 50,000 people. By merging geospatial information on the fire’s footprint with Zillow’s housing transaction data, we estimate both the spatial and temporal effects of the fire on real estate prices at a granular level. A number of important insights emerge. First, within 25 miles of the fire’s footprint, home prices increased by 13 percent in the six-week aftermath of the fire. Effects decay with distance and are statistically insignificant beyond 100 miles. Second, effects are detected within two weeks of the fire, fully materialize within four weeks, and are persistent up to ten months (which exhausts our period of consideration). Results are consistent with the relocation decisions of evacuees and are robust to a variety of specifications and modeling assumptions.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102023"},"PeriodicalIF":1.4,"publicationDate":"2024-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142425989","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-30DOI: 10.1016/j.jhe.2024.102026
Philipp Breidenbach , Patrick Thiel
To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations show- ing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local fac- tors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.
{"title":"Housing prices, airport noise and an unforeseeable event of silence","authors":"Philipp Breidenbach , Patrick Thiel","doi":"10.1016/j.jhe.2024.102026","DOIUrl":"10.1016/j.jhe.2024.102026","url":null,"abstract":"<div><div>To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations show- ing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local fac- tors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102026"},"PeriodicalIF":1.4,"publicationDate":"2024-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142425991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-25DOI: 10.1016/j.jhe.2024.102024
Alexander Dentler , Enzo Rossi
How much is a resident willing to pay to avoid a crime in the neighborhood? House price changes following a crime do not fully reflect the willingness to pay to avoid crime. Besides prices the market’s liquidity needs to be taken into account in this context. We detect market freezes following shootings, assaults, robberies, and burglaries. We propose a model, supported by empirical evidence, that combines the price and quantity dimensions into a single measure: economic welfare. The willingness to pay depends on the type of crime and averages between 7% and 18% of house valuations. These predictions are manifolds of the effect on prices estimated in this paper (0%–10%) and documented in the literature. Overall, our findings highlight the importance of considering market liquidity when examining the impact of crime on the real estate market.
{"title":"Residents’ willingness to pay to avoid crime","authors":"Alexander Dentler , Enzo Rossi","doi":"10.1016/j.jhe.2024.102024","DOIUrl":"10.1016/j.jhe.2024.102024","url":null,"abstract":"<div><div>How much is a resident willing to pay to avoid a crime in the neighborhood? House price changes following a crime do not fully reflect the willingness to pay to avoid crime. Besides prices the market’s liquidity needs to be taken into account in this context. We detect market freezes following shootings, assaults, robberies, and burglaries. We propose a model, supported by empirical evidence, that combines the price and quantity dimensions into a single measure: economic welfare. The willingness to pay depends on the type of crime and averages between 7% and 18% of house valuations. These predictions are manifolds of the effect on prices estimated in this paper (0%–10%) and documented in the literature. Overall, our findings highlight the importance of considering market liquidity when examining the impact of crime on the real estate market.</div></div>","PeriodicalId":51490,"journal":{"name":"Journal of Housing Economics","volume":"66 ","pages":"Article 102024"},"PeriodicalIF":1.4,"publicationDate":"2024-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142425990","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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