Submitted to Real Estate Economics
Abstract: This paper investigates how short-term fluctuations in air quality affect housing prices and identifies the behavioral response of housing market participants to temporary environmental conditions. Standard economic theory suggests that forwardlooking, rational individuals should base their decisions on long-term air quality expectations; thus, housing prices should not respond to transient changes in pollution. If prices do respond to temporary changes in pollution levels, this would indicate myopic behavior on the part of buyers and sellers. Using residential transaction data and pollution measures from South Korea between 2015 and early 2020, I find that temporary increases in pollution during the days when property visits and negotiations occur lead to lower housing prices. The effect is strongest for visible pollutants such as PM10. The results imply that buyers respond to salient environmental conditions at the time of seeing the property, and that the perceptible impact of pollution is a key driver of these short-run price adjustments.
Cheng, C., Deck, C., & Kim, W. (2023). Collective Action and Intra-Group Conflict: An Experiment. Defence and Peace Economics, 1-16.
Kim, Wonjong (2020) Single-Person Households and Crime, Korean Journal of Law and Economics,17(1): 137-160 (In Korean)
Kim, Duol and Wonjong Kim (2019) Nulla Poena Sine Lege: A Quantitative Analysis on Scope of Crimes, Level of Punishments, and Proportionality between Punishments in Korean Laws, The Justice, 170(3) (In Korean)Â
Behaviors in Homeowner Insurance Claim and Maintenance Against Storms (with Cary Deck, Amanda Ross)
The Impact of Pollution on Criminal Behavior (with Michael Price, Amanda Ross)