The impact of hurricanes on housing prices: evidence from U.S. coastal cities
AbstractWe investigate the effect of hurricane strikes on housing prices in U.S. coastal cities. To this end, we construct a new index of hurricane destruction which varies over time and space. Using this index and an annual, two equation, dynamic equilibrium correction panel model with area and time fixed effects, we model the effects of hurricanes on real house process and real incomes. In our model hurricanes have a direct effect on house prices and an indirect effect via a fall in local incomes. Our results show that the typical hurricane strike raises real house prices for a number of years, with a maximum effect of between 3 % to 4 % three years after occurrence. There is also a small negative effect on real incomes. These results are stable across models and subsamples.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Dallas in its series Working Papers with number 1009.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Murphy, Anthony & Strobl, Eric, 2009. "The Impact of Hurricanes on Housing Prices: Evidence from US Coastal Cities," MPRA Paper 19353, University Library of Munich, Germany.
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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