Risk Disclosure and Home Prices: Evidence from California Wildfire Hazard Zones
This RFF working paper evaluates the effectiveness of disclosure requirements for homes located in areas of high wildfire risk, finding that they help ensure that disaster risks are reflected in housing markets.
Damages from wildfires have increased dramatically in recent years. This study uses a boundary discontinuity design to estimate the effect of wildfire hazard disclosure on house prices. Using the universe of single-family sales transactions from the Zillow ZTRAX program in California from 2015 through 2022, we find that, on average, homes that faced disclosure requirements sold for approximately 4.3 percent less than nearby homes that did not. Price impacts are higher in recent years, following several damaging wildfires. Our findings highlight the use of disclosure regulations to ensure that disaster risks are reflected in housing markets.
Margaret A. Walls
Margaret Walls is a senior fellow at RFF. Her current research focuses on issues related to resilience and adaptation to extreme events, ecosystem services, and conservation, parks and public lands.
Matthew Wibbenmeyer is a fellow at RFF. His research seeks to understand climate impacts and climate mitigation policies related to the forest and land sectors, with a special focus on wildfire.
Data Scientist/Econometrician, Colaberry
Media Highlight — Sep 19, 2023
E&E News: “‘Negative’ Outlook Given to US Homeowners Insurance Sector”
An article on the growing risks of weather-related disasters for US homeowners and homeowners insurance companies.
Testimony and Public Comments — Sep 12, 2023
Comments on the National Strategy for a Sustainable Ocean Economy
This comment to the White House Office of Science and Technology Policy responds to a request for information on the National Strategy for a Sustainable Ocean Economy.
In Focus — Aug 30, 2023
In Focus: Carbon Emissions from Wildfire
This video shares insights about the record-breaking emissions from Canada’s wildfires and the implications for Canadian, US, and global emissions-reduction efforts, with RFF Fellow Matthew Wibbenmeyer.
Press Release — Aug 14, 2023
Western US Wildfire Smoke Costs $2.3 Billion per Year in Health Impacts and Lost Enjoyment
A new working paper, published by scholars at RFF and the University of Alaska Anchorage, finds that camping trips to public lands are worth $107 less on average if they are affected by wildfire smoke.