Affiliation:
1. University of British Columbia
2. University of Chicago
Abstract
Abstract
This paper studies whether house prices reflect belief differences about climate change. We show that in an equilibrium model of housing choice in which agents derive utility from ownership in a neighborhood of similar agents, prices exhibit different elasticities to climate risk. We use comprehensive transaction data to relate prices to inundation projections of individual homes and measures of beliefs about climate change. We find that houses projected to be underwater in believer neighborhoods sell at a discount compared to houses in denier neighborhoods. Our results suggest that house prices reflect heterogeneity in beliefs about long-run climate change risks.
Funder
Social Science and Humanities Research Council of Canada
SSHRC
National Science Foundation
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics,Finance,Accounting
Cited by
313 articles.
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