The Green Premium: Environmental Regulation, Environmental Risk and Property Value

Xun Fan (), Mengdi Liu (), Bing Zhang () and Weicheng Zhang ()
Additional contact information
Xun Fan: Nanjing University
Mengdi Liu: University of International Business and Economics
Bing Zhang: Nanjing University of Finance and Economics
Weicheng Zhang: Center for Environmental Management and Policy Analysis, Nanjing University

Environmental & Resource Economics, 2024, vol. 87, issue 5, No 1, 1096 pages

Abstract: Abstract This paper estimates the effect of the closure and relocation of chemical enterprises along the Yangtze River on housing prices in China. With a difference-in-differences (DiD) model and detailed data on polluting enterprises, house transactions, and environmental complaints, we find that environmental regulation led to a 1.7% increase in housing prices and a 43.3% reduction in perceived environmental risks, as measured by environmental complaints from surrounding residents. In addition, we observe a greater change in property values among taller buildings than among shorter buildings. This paper elucidates how developing countries can benefit from environmental regulation by influencing residents’ risk perceptions.

Keywords: Environmental regulation; Enterprise closure; Housing prices; Environmental risks; Perceived risks; Environmental complaints (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10640-024-00848-z

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