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The Marginal Cost of Mortality Risk Reduction: Evidence from Housing Markets

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  • Kelly Bishop
  • Nicolai V. Kuminoff
  • Sophie Mathes
  • Alvin Murphy

Abstract

We provide the first evidence that spatial variation in all-cause mortality risk is capitalized into US housing prices. Using a hedonic framework, we recover the annual implicit cost of a 0.1 percentage-point reduction in mortality risk among older Americans and find that this figure is both relatively low and decreasing in age, from $1,346 for a 67 year old to $246 for an 87 year old. These estimates are one-fifth of the size of comparable estimates found in the labor market, suggesting that the housing market provides an alternative, substantially cheaper channel to reducing mortality risk.

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  • Kelly Bishop & Nicolai V. Kuminoff & Sophie Mathes & Alvin Murphy, 2021. "The Marginal Cost of Mortality Risk Reduction: Evidence from Housing Markets," NBER Working Papers 29622, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29622
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    JEL classification:

    • H0 - Public Economics - - General
    • I0 - Health, Education, and Welfare - - General
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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