Opioid Crisis and Real Estate Prices

75 Pages Posted: 12 Nov 2020 Last revised: 27 Apr 2022

See all articles by Claudia Custodio

Claudia Custodio

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Nova School of Business and Economics

Dragana Cvijanovic

Cornell SC Johnson College of Business

Moritz Wiedemann

Imperial College London

Multiple version iconThere are 2 versions of this paper

Date Written: April 27, 2022

Abstract

This paper exploits variation in opioid prescriptions induced by the staggered passage of opioid-limiting legislation to study the impact of opioid abuse on house prices. Our results suggest that the decrease in home values due to opioid abuse is driven by the increase in housing supply following mortgage default and foreclosure, and by the lowering of local area attractiveness. The negative effect of opioid abuse on house prices is attenuated in locations with stronger social support policies. Overall, we conclude that opioid abuse has significant long lasting negative economic effects that are mitigated if opioid supply is limited.

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 (April 27, 2022). 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

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Dragana Cvijanovic (Contact Author)

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Moritz Wiedemann

Imperial College London ( email )

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

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