Authors: Davide Castellani

Abstract: This paper examines how tropical cyclones affect housing markets in the United States over time. While prices may rise briefly after a storm, they tend to decline significantly in the years that follow. We also find that people often settle in coastal areas with little past storm experience, but these locations are less prepared and see the largest and most persistent price drops. Rising insurance costs appear to play an important role. For policymakers, the results highlight the need to improve risk communication, strengthen preparedness in seemingly “safe” areas, and ensure well-functioning insurance markets to prevent households from underestimating long-term risks.

Link to paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5702982