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Drought and Property Prices: Empirical Evidence from Iran

Author

Listed:
  • Mohammad Reza Farzanegan

    (Philipps-Universitaet Marburg)

  • Mehdi Feizi

    (Ferdowsi University of Mashhad)

  • Hassan F. Gholipour

    (Swinburne University of Technology)

Abstract

This study demonstrates an economic consequence of climate change and water crises in Iran. It examines the effect of drought on housing prices, residential land prices, and housing rents in Iran. Using data from provinces of Iran from 1993 to 2015 and applying static and dynamic panel fixed effects estimators, we find evidence that an increase in the balance of water (reducing the severity of drought) within provinces has a positive effect on property prices. Our results have important implications for Iranian policymakers and property investors.

Suggested Citation

  • Mohammad Reza Farzanegan & Mehdi Feizi & Hassan F. Gholipour, 2019. "Drought and Property Prices: Empirical Evidence from Iran," MAGKS Papers on Economics 201916, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201916
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    More about this item

    Keywords

    Drought; Water Crisis; Property Prices; Housing; Iran;
    All these keywords.

    JEL classification:

    • 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
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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