Opioid Crisis and Real Estate Prices *

84 Pages Posted: 12 Nov 2020 Last revised: 7 Apr 2025

See all articles by Claudia Custodio

Claudia Custodio

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Dragana Cvijanovic

Cornell SC Johnson College of Business; European Corporate Governance Institute (ECGI)

Moritz Wiedemann

Rotterdam School of Management, Erasmus University

Multiple version iconThere are 2 versions of this paper

Date Written: February 21, 2024

Abstract

We study the impact of opioid abuse on real estate prices. We document that opioid death rates and excess prescription rates are negatively associated with house prices. Exploiting the staggered passage of opioid-limiting legislation, we find that a decrease in opioid abuse results in higher county-level house prices. This effect is due to fewer mortgage delinquencies, lower vacancy rates, more home improvement loans, and increased population inflow. Our findings are consistent with improved real estate conditions and a rise in local demand. These results highlight the importance of public health policy in mitigating the economic costs of the opioid epidemic.

Keywords: Opioid crisis, real estate prices, health economics

JEL Classification: I10, I12, I18, R20, R30

Suggested Citation

Custodio, Claudia and Cvijanovic, Dragana and Wiedemann, Moritz, Opioid Crisis and Real Estate Prices * (February 21, 2024). Available at SSRN: https://ssrn.com/abstract=3712600 or http://dx.doi.org/10.2139/ssrn.3712600

Claudia Custodio

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Dragana Cvijanovic (Contact Author)

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Moritz Wiedemann

Rotterdam School of Management, Erasmus University ( email )

RSM Erasmus University
PO Box 1738
Rotterdam, 3062 PA
Netherlands

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