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Temperatures and search: evidence from the housing market

Author

Listed:
  • Michele Cascarano

    (Bank of Italy)

  • Filippo Natoli

    (Bank of Italy)

Abstract

Climate and weather variations affect search and matching processes. We provide evidence for the housing market by combining daily temperatures in Italian cities with online search for 2 million ads and in-person appointments with real estate agents. Two results stand out. First, extremely hot temperatures reduce search, both online and physical, increasing time to sale and delaying housing transactions. Second, they induce a preference shift away from properties that are not climate-safe, leading to persistently lower prices. Extreme temperature effects are asymmetric as colder months induce an increase in online (but not physical) search.

Suggested Citation

  • Michele Cascarano & Filippo Natoli, 2023. "Temperatures and search: evidence from the housing market," Temi di discussione (Economic working papers) 1419, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1419_23
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    More about this item

    Keywords

    climate change; temperatures; housing search; house prices;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • G1 - Financial Economics - - General Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • 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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