Financial value of nature: coastal housing markets, mangroves, and climate resilience

Teng Liu, Brook Constantz, Galina Hale and Michael W Beck

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: Measuring the financial value of nature is difficult, often resulting in insufficient funding directed to nature conservation and restoration. As coastal risks increase due to development and climate change, a tangible benefit of nature is the protection it offers against storm damage. Many studies from the risk industry and others assess the direct effects of wetlands for reducing damage during storms. However, the value of wetlands for coastal protection could extend to many other benefits, including home prices in areas where storms are common. We use property-level housing transaction data from Zillow and show that proximity to mangroves in Florida moderates home price decline and dispersion following major hurricanes. The effects are substantial in magnitude, reducing the probability of losing a quarter or more of the housing value by 2–7 percentage points, which corresponds to 20–40-thousand-dollar value for a million-dollar property, conditional on a hurricane.

Keywords: 3501 Accounting; Auditing and Accountability (for-2020); 3502 Banking; Finance and Investment (for-2020); 35 Commerce; Management; Tourism and Services (for-2020); 13 Climate Action (sdg); climate; hurricanes; nature-based adaptation; housing; property values; Q54; G12; R31; 1501 Accounting; Auditing and Accountability (for); 1502 Banking; Finance and Investment (for); Finance (science-metrix); 3501 Accounting; auditing and accountability (for-2020); 3502 Banking; finance and investment (for-2020) (search for similar items in EconPapers)
Date: 2025-01-01
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