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Financial value of nature: coastal housing markets, mangroves, and climate resilience

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  • Teng Liu
  • Brook Constantz
  • Galina Hale
  • Michael W Beck

Abstract

Measuring the financial value of nature is difficult, often resulting in insufficient funding directed to nature conservation and restoration. As coastal risks increase due to development and climate change, a tangible benefit of nature is the protection it offers against storm damage. Many studies from the risk industry and others assess the direct effects of wetlands for reducing damage during storms. However, the value of wetlands for coastal protection could extend to many other benefits, including home prices in areas where storms are common. We use property-level housing transaction data from Zillow and show that proximity to mangroves in Florida moderates home price decline and dispersion following major hurricanes. The effects are substantial in magnitude, reducing the probability of losing a quarter or more of the housing value by 2–7 percentage points, which corresponds to 20–40-thousand-dollar value for a million-dollar property, conditional on a hurricane.

Suggested Citation

  • Teng Liu & Brook Constantz & Galina Hale & Michael W Beck, 2026. "Financial value of nature: coastal housing markets, mangroves, and climate resilience," Review of Finance, European Finance Association, vol. 30(1), pages 87-129.
    • Handle: RePEc:oup:revfin:v:30:y:2026:i:1:p:87-129.
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    File URL: http://hdl.handle.net/10.1093/rof/rfaf061
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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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