Opioid Crisis and Real Estate Prices

57 Pages Posted: 12 Nov 2020 Last revised: 27 Nov 2023

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

Moritz Wiedemann

Imperial College London

Multiple version iconThere are 2 versions of this paper

Date Written: November 17, 2023

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

Suggested Citation

Custodio, Claudia and Cvijanovic, Dragana and Wiedemann, Moritz, Opioid Crisis and Real Estate Prices (November 17, 2023). 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

Moritz Wiedemann

Imperial College London ( email )

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

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