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The Price of Indoor Air Pollution: Evidence from Risk Maps and the Housing Market

Author

Listed:
  • Edward W. Pinchbeck
  • Sefi Roth
  • Nikodem Szumilo
  • Enrico Vanino

Abstract

This study uses the housing market to examine the costs of indoor air pollution. We focus on radon, a common indoor air pollutant which is the leading cause of lung cancer after smoking. For identification, we exploit a natural experiment whereby a risk map update in England induces exogenous variation in published pollution risk levels. We find a significant negative relationship between changes in published pollution risk levels and residential property prices. Interestingly, we do not find a symmetric effect for decreasing risk. We also show that the update of the risk map led higher socioeconomic groups (SEGs) to move away from affected areas, attracting lower SEG residents via lower prices. Overall, our results demonstrate that indoor air quality has material economic effects on the housing market and provide novel policy-relevant insights into how the market responds to information on environmental risks.

Suggested Citation

  • Edward W. Pinchbeck & Sefi Roth & Nikodem Szumilo & Enrico Vanino, 2023. "The Price of Indoor Air Pollution: Evidence from Risk Maps and the Housing Market," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(6), pages 1439-1473.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/725028
    DOI: 10.1086/725028
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    Citations

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    Cited by:

    1. Robert Metcalfe & Sefi Roth, 2025. "Making the Invisible Visible: The Impact of Revealing Indoor Air Pollution on Behavior and Welfare," Framed Field Experiments 00819, The Field Experiments Website.
    2. Nie, Rong & Song, Jinbo & Carneiro, Juliana, 2024. "Does emissions data disclosure of Waste-to-Energy incineration plants mitigate NIMBYism concerns? Evidence from the housing market," The Warwick Economics Research Paper Series (TWERPS) 1527, University of Warwick, Department of Economics.
    3. Gruhl, Henri & Volkhausen, Nicolas & Pestel, Nico & aus dem Moore, Nils, 2025. "Air pollution and the housing market: Evidence from Germany’s Low Emission Zones," Journal of Environmental Economics and Management, Elsevier, vol. 132(C).
    4. Tom Gillespie & Ronan C. Lyons & Thomas K. J. McDermott, 2025. "Estimating the Flood Risk Discount: Evidence From a One-off National Information Shock," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(5), pages 1195-1212, May.
    5. Mustahsin Aziz & Levan Elbakidze, 2025. "Invisible Barrier: The Impact of Air Quality on Chronic School Absenteeism in the US," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(3), pages 655-680, March.
    6. Morakinyo O. Adetutu, 2025. "The political economy of environmental legislation: evidence from the British Parliament," Public Choice, Springer, vol. 203(1), pages 205-235, April.
    7. Niu, Dongxiao & Eichholtz, Piet & Kok, Nils, 2025. "Asymmetric information provision and flood risk salience," Journal of Housing Economics, Elsevier, vol. 68(C).
    8. Nie, Rong & Carneiro, Juliana & Song, Jinbo & Qiu, Yueming, 2025. "Real-time emissions data disclosure of Waste-to-Energy incineration plants and public risk perceptions: Evidence from the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 133(C).
    9. Metcalfe, Robert & Roth, Sefi, 2025. "Making the invisible visible: the impact of revealing indoor air pollution on behavior and welfare," LSE Research Online Documents on Economics 128514, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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