Market responses to hurricanes

Daniel G. Hallstrom, V. Kerry Smith

Research output: Contribution to journalArticlepeer-review

162 Scopus citations

Abstract

This paper uses one of the strongest hurricanes to hit the US, Andrew in 1992, to define a quasi-random experiment that permits estimation of the responses of housing values to information about new hurricanes. Lee County, Florida did not experience damage from Andrew. The storm was a "near-miss." We hypothesize that Andrew conveyed risk information to homeowners in the county. A difference-in-differences (DND) framework identifies the effect of this information on property values in areas likely to experience significant storm damage. The DND findings indicate at least a 19 percent decline in property values.

Original languageEnglish (US)
Pages (from-to)541-561
Number of pages21
JournalJournal of Environmental Economics and Management
Volume50
Issue number3
DOIs
StatePublished - Nov 2005

Keywords

  • Hedonic property model
  • Hurricane risk
  • Repeat sales

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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