Opioid Crisis and Real Estate Prices

Abstract

This study investigates the impact of opioid abuse on real estate prices using variation in opioid prescription rates induced by the staggered passage of opioid-limiting legislation. Employing difference-in-differences, regression discontinuity design, and instrumental variables, we find that effective anti-opioid legislation results in an increase in county-level house prices. This is due to a decrease in mortgage delinquencies and vacancy rates, and an increase in home improvement loans and population inflow. These results are consistent with an improvement in the quality of local real estate, and an increase in the local demand for space being the main drivers of the increase in real estate prices. Our results highlight the need for policy interventions to address the opioid epidemic's economic costs.

Keywords: Opioid crisis, real estate prices, health economics

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