COVID-19, Political Orientation and Residential Real Estate Returns

36 Pages Posted: 1 Oct 2020 Last revised: 13 Apr 2022

See all articles by Zinat S. Alam

Zinat S. Alam

University of North Texas, College of Business Administration, Department of Finance, Insurance Real Estate and Law

Md Miran Hossain

University of North Carolina at Wilmington - Cameron School of Business - Department of Economics and Finance

Date Written: February 28, 2022

Abstract

This paper investigates whether political orientation has an influence on residential real estate returns in the context of the Covid-19 pandemic. Using county level housing data from January to June 2020, we document that the Democratic counties and the counties with higher prosocial scores experience a significant decline in residential real estate returns on the early onset of Covid-19 pandemic. Our estimate suggests that an 10% increase in Covid deaths is associated with an 8.48% annual decline in real estate returns in Democratic counties. Residential real estate returns are also negatively associated with Covid-19 statistics in counties with liberal news viewership. Difference-in-difference estimates show that the influence of political orientation on real estate returns is unique to the Covid-19 crisis period. Overall, our findings underscore political orientation as an important dimension that affects asset returns.

Keywords: COVID-19, Real Estate, Asset Pricing

JEL Classification: G4, G12, I15, P16, P25, R10

Suggested Citation

Alam, Zinat S. and Hossain, Md Miran, COVID-19, Political Orientation and Residential Real Estate Returns (February 28, 2022). Available at SSRN: https://ssrn.com/abstract=3702589 or http://dx.doi.org/10.2139/ssrn.3702589

Zinat S. Alam

University of North Texas, College of Business Administration, Department of Finance, Insurance Real Estate and Law ( email )

1155 Union Circle #305340
Denton, TX 76203
United States

Md Miran Hossain (Contact Author)

University of North Carolina at Wilmington - Cameron School of Business - Department of Economics and Finance ( email )

Wilmington, NC 28403
United States

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