The effect of soil pollution information disclosure on housing prices

Xiaohan Wang and Mengjun Yang

China Economic Review, 2024, vol. 83, issue C

Abstract: By utilizing the “Construction Land Soil Pollution Risk Control and Remediation Directory” released by various provincial governments in China as an exogenous shock, this paper explores the impact of disclosing soil pollution information on housing prices around contaminated sites. Our findings demonstrate that the release of soil pollution information led to an average reduction of 3.3% in secondhand housing prices, indicating a market premium for houses located farther from contaminated sites. Mechanism analysis reveals that the public release of pollution information motivates sellers to expedite transactions by strategically lowering listed prices, contributing to an overall decrease in housing prices. This paper provides causal identification evidence regarding the real estate market's responsiveness to soil pollution information, offering insights from China.

Keywords: Soil pollution; Information disclosure; Housing prices; Difference-in-differences (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:83:y:2024:i:c:s1043951x24000014

DOI: 10.1016/j.chieco.2024.102112

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