Working Paper: NBER ID: w27542
Authors: Joshua S. Graff Zivin; Yanjun Liao; Yann Panassie
Abstract: This paper examines the impacts of hurricanes on the housing market and the associated implications for local population turnover. We first characterize the post-hurricane equilibrium dynamics in local housing markets using microdata from Florida during 2000-2016. Our results show that hurricanes cause an increase in equilibrium prices and a concurrent decrease in transactions in affected areas, both lasting up to three years. Together, these dynamics imply a negative transitory shock to the housing supply as a consequence of the hurricane. Furthermore, we match buyer characteristics from mortgage applications to provide the first buyer-level evidence on population turnover. We find that incoming homeowners in this period have higher incomes, leading to an overall shift in the local economic profile toward higher-income groups. Our findings suggest that market responses to destructive natural disasters can lead to uneven and lasting demographic changes in affected communities, even with a full recovery in physical capital.
Keywords: Hurricanes; Housing Market; Population Turnover; Florida
JEL Codes: J10; Q54; R23; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hurricanes (Q54) | Increase in home prices (R31) |
| Hurricanes (Q54) | Decrease in transaction probability (C69) |
| Increase in home prices (R31) | Demographic shift towards higher-income groups (J11) |
| Hurricanes (Q54) | Lasting demographic changes (J11) |