Do Housing Prices Reflect Disaster Risk Where People Believe in Climate Change?

Abstract

This study examines whether home prices in counties hit by major hurricanes adjust to reflect disaster risk, and whether that adjustment depends on local belief in climate change. Prior research (Baldauf, Garlappi, and Yannelis 2020) found that housing markets price climate risk mainly where belief in climate change is high. The analysis tests this hypothesis around Hurricanes Ian (2022) and Helene (2024) using a stacked difference-in-differences design that compares monthly Zillow home values in FEMA-designated hard-hit counties with unaffected counties, across roughly 600 counties. The results show no robust effect. The estimated average impact on home values is close to zero (0.1 percent), and the apparently stronger response in high-belief counties reflects pre-existing price trends in Florida coastal markets rather than a reaction to the storms. This null result contradicts earlier findings, but it may reflect coarse measurement, since hard-hit counties are identified with a binary federal aid flag. To address this, county-level landfall geography, including landfall points, hurricane-force wind extent, and storm surge footprints, is being hand-collected from official NOAA reports to build a graded exposure measure and test whether the null result survives a more precise definition of storm exposure.