Economics and Finance Research Talk

Speaker: Dimitrios Gounopolous (University of Bath) Topic: The Impact of Wildfire Smoke on Real Estate Market Abstract: Using detailed housing transaction data in the U.S. covering 2010-2019 period, we find that wildfire-generated smoke negatively predict both housing valuation and real estate market liquidity. Listings in smoke-exposed areas experience longer outstanding days, suffer a widening opening-closing price spectrum, thus leading to overall market activity reduction. The exogeneity of smoke incidence to local economic activities suggests a causal relationship of how wildland-fire by-product determines the U.S. housing market. Besides concentrating in areas experiencing multiple incidences in a year, smoke reveals its strongest effect on property market within the first 6 to 12 months before dissipating one year later. We observe the most pronounced effect in areas whose population is generally concerned about climate change. Our findings attribute smoke influencing on housing market to migration channel.

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