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Legacies of Lead: Estimating Home Buyer Response to Potential Lead Exposure

Legacies of Lead: Estimating Home Buyer Response to Potential Lead Exposure <p>ABSTRACT:</p><p>Excessive levels of lead in homes pose health hazards, but exposure is discerned ex post. As a precaution, local jurisdictions assign risk levels to neighborhoods based on contamination potential and require blood lead testing, leading to decreased desirability. This paper examines capitalization effects of lead risk disclosure from such an information-based policy, exploiting spatially varying implementation of a childhood lead reduction program identifying price effects via a triple-difference border discontinuity model. Information about lead risks lowers high-risk house prices by 7.7% while shifting neighborhood composition, suggesting the program altered risk perceptions, creating unintended consequences in the market. <i>(JEL Q58, R21)</i></p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Legacies of Lead: Estimating Home Buyer Response to Potential Lead Exposure

Land Economics , Volume 96 (2) – Apr 8, 2020

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Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325

Abstract

<p>ABSTRACT:</p><p>Excessive levels of lead in homes pose health hazards, but exposure is discerned ex post. As a precaution, local jurisdictions assign risk levels to neighborhoods based on contamination potential and require blood lead testing, leading to decreased desirability. This paper examines capitalization effects of lead risk disclosure from such an information-based policy, exploiting spatially varying implementation of a childhood lead reduction program identifying price effects via a triple-difference border discontinuity model. Information about lead risks lowers high-risk house prices by 7.7% while shifting neighborhood composition, suggesting the program altered risk perceptions, creating unintended consequences in the market. <i>(JEL Q58, R21)</i></p>

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Apr 8, 2020

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