Losing ground? On sinkhole collapses and house prices

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Abstract

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.
Original languageEnglish
Title of host publicationLOSING GROUND? ON SINKHOLE COLLAPSES AND HOUSE PRICES
Publication statusIn preparation - 2017
Event64th North American Meetings of the Regional Science Association International - Hyatt Regency Hotel, Vancouver, Canada
Duration: 8-Nov-201711-Nov-2017
http://www.narsc.org/newsite/conference/

Conference

Conference64th North American Meetings of the Regional Science Association International
CountryCanada
CityVancouver
Period08/11/201711/11/2017
Internet address

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