Rockets: The housing market effects of a credible terrorist threat
Asaf Zussman () and
Journal of Urban Economics, 2017, vol. 99, issue C, 136-147
This paper explores the economic costs of conflict using a unique experiment. We analyze the effects of Hezbollah’s massive surprise rocket attack against northern Israel during the 2006 Second Lebanon War and the continued threat posed by the organization’s expanding rocket arsenal on the housing market, the labor market and patterns of migration flows and sorting. Relying on hedonic and repeat sales approaches and using a difference-in-differences identification strategy for 2000–2012, we show that the attack led to a 6–7% decline in house prices and rents in the most severely hit localities relative to other localities in northern Israel. These effects persisted until 2012, suggesting that the public continued to view the rocket threat as credible. In contrast, we find practically no effect on labor market conditions, migration flows and sorting.
Keywords: Housing market; Terrorism; Israel (search for similar items in EconPapers)
JEL-codes: F52 R21 R23 R31 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:99:y:2017:i:c:p:136-147
Access Statistics for this article
Journal of Urban Economics is currently edited by S.S. Rosenthal and W.C. Strange
More articles in Journal of Urban Economics from Elsevier
Series data maintained by Dana Niculescu ().