Learning to Price Climate Risk: Salience and Flood-Risk Capitalization in Spanish Housing Markets after the 2024 Flash Flood of Valencia

José García-Montalvo

No 1600, Working Papers from Barcelona School of Economics

Abstract: Do housing markets price flood risk only when a disaster makes it salient? I combine 3.4 million notarial housing transactions in Spain (2007–2025) with official flood-hazard maps and use the October 2024 Valencia DANA, which killed 232 people, as a nationwide shock to the salience of long-available risk information. After the DANA, prices per square meter in 10-year flood zones fell by about 8 % relative to unexposed dwellings, even outside the affected municipalities; repeat-sales estimates imply a decrease of 4-5 %. Before the event, these zones sold at no discount. Within the affected municipalities, demand shifted toward nearby safe housing, increasing prices in those areas and decreasing housing prices in affected areas.

Keywords: climate change; natural disasters; flood risk; housing prices; capitalization; risk salience; valencia (search for similar items in EconPapers)
JEL-codes: Q51 Q54 R21 R31 (search for similar items in EconPapers)
Date: 2026-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/1600_compressed.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1600

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().