RT Journal Article
SR Electronic
T1 Legacies of Lead: Estimating Home Buyer Response to Potential Lead Exposure
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 171
OP 187
DO 10.3368/le.96.2.171
VO 96
IS 2
A1 Irwin, Nicholas B.
YR 2020
UL http://le.uwpress.org/content/96/2/171.abstract
AB Excessive levels of lead in homes pose health hazards, but exposure is discerned ex post. As a precaution, local jurisdictions assign risk levels to neighborhoods based on contamination potential and require blood lead testing, leading to decreased desirability. This paper examines capitalization effects of lead risk disclosure from such an information-based policy, exploiting spatially varying implementation of a childhood lead reduction program identifying price effects via a triple-difference border discontinuity model. Information about lead risks lowers high-risk house prices by 7.7% while shifting neighborhood composition, suggesting the program altered risk perceptions, creating unintended consequences in the market. (JEL Q58, R21)