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Virtual Seminar on Climate Economics - Shared screen
Richard Tol
Is SLR global sea level rise, regional sea level rise, or relative sea level rise?
Russell Wong
It is the property-level
Thomas Stoerk
One question on the belief data: why do you use 2014? It seems the data are available for 2020, and beliefs might have shifted in the last years. See here: https://climatecommunication.yale.edu/visualizations-data/ycom-us/
Laura Bakkensen
We started with year 2014 data but on our to do list is to test additional years. Ideally we would have beliefs from the time of each sale.
Amine Ouazad
Hurricane storm surge heights can reach 25-30 feet, while SLR is a fraction of this. Of course the two interact (higher SLR -> higher surge). Should the NOAA SLOSH data be used here?
R. Jisung Park
Not to take anything away from the heavy data lift! But it seems the last assumption is an important one, especially in a scenario in which the coastal housing purchases in a county are driven by individuals within a given county who think they are engaging in local arbitrage - "everyone in my neighborhood thinks climate change is a big deal, but I'm not as pessimistic." Could this within-county sorting be affecting your results? In other words, could the county-level average climate belief be infra-marginal for the market of interest here? Maybe I am missing something. I also realize this is probably the best available climate belief data.
Richard Tol
sorry have to run family issue (nothing serious)
Russell Wong
Thx @Amine, we will check that out too.
Russell Wong
Hi @Andrew, we also do robust check at other level too
Russell Wong
Ah, Toan just flashed it
Glenn Rudebusch
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Fanny Cartellier
Are buyers and sellers aware of the very specific SLR risk of each house ? do they have access to such granular SLR risk data ? If it was not the case, I guess that the variation in price or leverage could not be imputed to such a granular variation in SLR risk
Laura Bakkensen
SLR map viewers are publicly available online through NOAA (same data we use) so in theory buyers and sellers can access the information. To the extent that buyers and sellers do not access this information, the results may be attenuated. It was comforting that we are still replicating a price discount in home sales for homes at risk for SLR, indicating that the information has at least some salience
Russell Wong
Hi @Jisung, yes the Yale belief survey is on the county level and it allows us to relate to >1M transaction level data in the US market. We don't have the individual-level data on belief on the national level but we cross check with the Rhone Island survey by Laura (where homebuyer belief is surveyed) and it is consistent.
Russell Wong
Hi @Andrew we use the county of the homebuyer.
Russell Wong
John Foppert
What is the relationship between leverage and buyers' county-level climate beliefs for the purchase of non-climate-exposed assets? Do people from climate-skeptical counties just have less cash on hand than people from climate-worried counties?
Amine Ouazad
The climate change beliefs are also those of loan officers, underwriters, i.e. the mortgage supply side. Are we isolating the beliefs of buyers?
james cox
study assumes pessimist vs not pessimist but reality is probably more of a spectrum
Bo Yu
The variable of interest is on the county level (since you don't have individual data and as such county FE can't be controlled for). Hence, would your results be interpreted as the difference between counties closed to coast and counties that are not closed to coast?
Joakim Weill
One way to test Rob Engle’s point might to test whether the SLR/price & SLR/leverage relationships stay constant with the BW-Act and HFIA reforms (which removed subsidies for a subset of properties and improved risk pricing)
Laura Bakkensen
@James: We do use a continuous definition of climate beliefs as well in our model and have similar results
james cox
Is there a study about impact of Sandy on shore properties in NJ? ie impact on views/prices before/after Sandy
Laura Bakkensen
@Bo: The FE subsumes the beliefs variable but we can still identify the interaction between beliefs and SLR, since it is at the property level. So we can use more refined fixed effects.
Russell Wong
Hi @John, unfortunate we don't have the buyer's balance sheet data so we don't know if the people from climate skeptical counties are more cash-tight. But we have county FE so it should mitigate some of this concern.
Laura Bakkensen
@Joakim: Many thanks for this great suggestion. We have tried to examine these relationships over time but that's a great suggestion to see if we can isolate the impacts of these policy reforms
Russell Wong
Hi @Amine, yes it is buyer's belief but we also add bank FE to capture the lender belief
Laura Bakkensen
@James: Yes, there is some interesting work by others on Sandy, for example Ortega, F., & Taṣpınar, S. (2018); Gibson, M., & Mullins, J. T. (2020); McCoy, S. J., & Zhao, X. (2018)
james cox
@Laura Thank you!
Laura Bakkensen
@James: Dundas, S. J. (2017) is specific to NJ and views
Glenn Rudebusch
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