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Substance Use Disorder Treatment Centers and Residential Property Values

Brady Horn (), Aakrit Joshi and Johanna Catherine Maclean

American Journal of Health Economics, 2021, vol. 7, issue 2, 185 - 221

Abstract: Substance use disorders (SUDs) are a major social concern. There is an extensive economic literature estimating the social costs associated with SUDs in terms of health care, labor market outcomes, and crime. However, beyond anecdotal claims that SUD treatment centers (SUDTCs), settings in which patients receive care, reduce residential property values, there is little empirical work on this question. We apply a spatial difference-in-differences model and administrative data to test this relationship. We find that SUDTCs sort into lower-value areas, but once SUDTC selection is addressed, we find no evidence that SUDTCs influence residential property values.

Date: 2021
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