Economic Effects of Environmental Crises: Evidence from Flint, Michigan

87 Pages Posted: 16 Jul 2019 Last revised: 20 Mar 2021

See all articles by Peter Christensen

Peter Christensen

University of Illinois at Urbana-Champaign

David Keiser

University of Massachusetts Amherst

Gabriel Lade

Macalester College - Department of Economics

Date Written: January 01, 2021

Abstract

In April 2014, Flint, Michigan switched its drinking water supply from the Detroit water system to the Flint River as a temporary means to save $5M. Over eighteen months, it was revealed that the switch exposed residents to dangerous levels of lead, culminating in an emergency declaration in October 2015. This paper examines the impact of this crisis on the Flint housing market. The value of Flint's housing stock has fallen by $480M despite over $400M in government spending to remediate the crisis. Home prices remain depressed through August 2019, sixteen months after the water was declared safe for consumption.

Keywords: drinking water, pollution, lead, Flint, crisis, averting behavior, hedonics

JEL Classification: H12, H41, Q51, Q52, Q58, R31

Suggested Citation

Christensen, Peter and Keiser, David and Lade, Gabriel, Economic Effects of Environmental Crises: Evidence from Flint, Michigan (January 01, 2021). Available at SSRN: https://ssrn.com/abstract=3420526 or http://dx.doi.org/10.2139/ssrn.3420526

Peter Christensen

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL Champaign 61820
United States

David Keiser (Contact Author)

University of Massachusetts Amherst ( email )

Resource Economics
UMass
Amherst, MA 01003
United States

Gabriel Lade

Macalester College - Department of Economics ( email )

1600 Grand Ave.
Saint Paul, MN 55105
United States

HOME PAGE: http://gabe-lade.com

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