Sinkholes are a natural hazard of national scope. The repair of real estate, infrastructure and nature represents a significant cost for local governments. Moreover, the unpredictable nature of sinkholes has important implications on the demand for housing. This study investigates the external effects of sinkholes on local house prices. We propose a difference-in-difference approach by comparing quality-adjusted single family homes in a predefined target and control area before and after the occurrence of sinkholes. We also model the spatial and temporal dimensions of the external effects of sinkholes using data for Orange County, Florida, between 2000 and 2014. We find evidence of regional effects of sinkhole occurrences on house prices. The effects are small, but persistent. We find no evidence that sinkhole occurrences have short-term local external effects on nearby house prices.
|Title of host publication||LOSING GROUND? ON SINKHOLE COLLAPSES AND HOUSE PRICES|
|Publication status||In preparation - 2017|
|Event||64th North American Meetings of the Regional Science Association International - Hyatt Regency Hotel, Vancouver, Canada|
Duration: 8-Nov-2017 → 11-Nov-2017
|Conference||64th North American Meetings of the Regional Science Association International|
|Period||08/11/2017 → 11/11/2017|