Health Crisis and Housing Market Effects - Evidence from the U.S. Opioid Epidemic
37 Pages Posted: 2 Oct 2019 Last revised: 2 Jan 2021
Date Written: September 20, 2019
We present evidence on the effect of a public health crisis on housing markets through the lens of the recent opioid crisis in the U.S. Using data on opioid prescriptions and repeat sales in Ohio, we find that house price changes around opioid dispensaries are negatively associated with the quantity of opioids dispensed and the magnitude of the effect dissipates with distance from dispensing locations. The results are consistent across different measures of opioids dispensed. We use a measure of supply that is based on vertical integration between distributors and pharmacies, and discuss that our results imply a causal inference on opioid dispenses negatively affecting house prices. In addition, we present evidence that the externality effect is more pronounced for higher priced properties, thereby implying a shift in demand and mobility patterns in affected areas. Our work informs the broader policy discussion on economic costs resulting from health crises.
Keywords: externalities, health crisis, house prices, opioid epidemic
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