RT Journal Article
SR Electronic
T1 Who Cares? Future Sea Level Rise and House Prices
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 207
OP 224
DO 10.3368/le.96.2.207
VO 96
IS 2
A1 Filippova, Olga
A1 Nguyen, Cuong
A1 Noy, Ilan
A1 Rehm, Michael
YR 2020
UL http://le.uwpress.org/content/96/2/207.abstract
AB Sea level rise is a consequence of climate change. Using evidence from a coastal community, we pose a question: Do people factor in warnings by scientists and governments about sea level rise when making their investment decisions? Using a difference-in-differences framework, we examine if disclosure of future risks affects coastal property prices. New Zealand’s Kapiti Coast published detailed projections of coastal erosion in 2012 and was forced to remove them by the courts in 2014. Results indicate posting of this information had an insignificant impact on prices, suggesting people do not factor in long-term risks of sea level rise, as future risks are not capitalized in prices. (JEL Q54, R38)