Jacob Macdonald (p), Sofia Franco

Ilaria Mariotti

This work considers the capitalization of urban hazard information via the residential real estate market of Lisbon, Portugal. We employ a spatial hedonic framework to estimate the impact of being located across areas in the municipality with a heterogeneity of urban flooding risks or seismic hazards. Special attention is given to the modifiable aerial unit problem and spatial influences in constructing measures or incorporating spatial considerations to the empirical estimation. We construct gridded spatial fixed effects which mitigate these biases and further employ a geographic regression discontinuity ensuring our results are not sensitive to underlying locational features.
Results indicate that the residential real estate market responds to hazard information with lower dwelling prices observed in areas with a high risk in the range of 2.3% for flooding risk and 1.1% for seismic risk. The largest response occurs due to urban flooding which is highly publicized and a relatively common occurrence for residents in comparison to seismic activity. Results suggest further that the combined effect of being subject to multiple hazards yield larger price reductions in the order of 2.8%, highlighting the importance of considering local contexts and interactive behaviour for policy discussion and mitigation planning. Flooding risk zones are heterogeneous in their impacts with ecological amenities such as parks or urban forests mitigating this negative impact while higher density areas compound the negative effect.

Lars Vandrei (p), Carolin Fritzsche

Ilaria Mariotti

This paper uses recent data for single-family home purchases to study the effects of the German real estate transfer tax. We aim to separate the tax’s anticipatory effects from its lock-in effects on real estate transactions. The data indicate that an increase in the transfer tax is negatively cor-related with the number of transactions that take place in the market for single-family homes. We estimate that a one-percentage-point increase in the transfer tax produces enormous anticipa-tion effects and yields approximately 6% fewer transactions due to the lock-in effect.

Ulrike Illmann (p), Georg Hirte

Ilaria Mariotti

This paper explores the commuting paradox in the context of two-partner households by estimat-ing the relationship between the subjective well-being (SWB) of spouses and their commuting dis-tances. Some of the former literature has found evidence that individuals are not fully compen-sated for changes in commuting (the commuting paradox). We study unitary, cooperative and non-cooperative decision making models to explore which describes the household decision on com-muting in the data. We use panel data from the German Socio-Economic Panel (GSOEP). The re-gressions show clear evidence for cooperative household decision making on commuting distances (time) and do not show evidence of the commuting paradox. These results are robust in several robustness checks, including alternative definitions of household utility.