RT Journal Article
SR Electronic
T1 Risk Disclosure and Home Prices: Evidence from California Wildfire Hazard Zones
JF Land Economics
FD University of Wisconsin Press
SP 6
OP 21
DO 10.3368/le.100.1.102122-0087R
VO 100
IS 1
A1 Ma, Lala
A1 Walls, Margaret
A1 Wibbenmeyer, Matthew
A1 Lennon, Connor
YR 2024
UL http://le.uwpress.org/content/100/1/6.abstract
AB Damages from wildfires have increased dramatically in recent years. This study uses a boundary discontinuity design to estimate the effect of wildfire-hazard disclosure on house prices. Using the universe of single-family sales transactions from Zillow’s Transaction and Assessment Database in California from 2015 through 2022, we find that, on average, homes facing disclosure requirements sold for approximately 4.3% less than nearby homes that did not. Price impacts are higher in recent years, after several damaging wildfires. Our findings highlight the use of disclosure regulations to ensure that disaster risks are reflected in housing markets.