For this week’s RITM seminar, we are hosting Marianne Bléhaut from the University of Paris Sud. She will be presenting “The impact of industrial risk regulation on local housing markets: Evidence from a French policy change” (with Amélie Mauroux (University Paris Dauphine, Crest). The RITM seminar will be on Thursday, January 28, in Gaudemet room, from 2 to 3.30 pm.
In this paper, we estimate the impact of a risk prevention policy based on land use planning on housing markets. We focus on the impact of local regulation plans that were created in 2003 in France in the wake of a massive industrial accident. This new policy impacts the housing markets in the vicinity of industrial plants through many channels (risk perception, land use offer, etc.). Hedonic price models and land use models predict both positive and negative effects on price and neighborhood composition. Assessing the global impact of such a change is thus a fundamentally empirical question. We observe housing markets close to industrial plants before and after each local regulation is implemented. At each date, we can observe at-risk territories at different stage of the regulation process. Our identification strategy relies on these temporal and spatial variations and is similar to a difference-in-difference approach on panel data. This model is estimated on real estate transactions data and on a high quality administrative data on the housing stock to capture potential neighborhood changes.
Our results suggest that additional risk regulation in France translated into a significant decrease in the price of houses and in a decrease of the price of apartments in the neighborhood of industrial plants. Moreover, the policy change lead to a decrease in the number of transactions. However, we find no evidence of spatial segregation induced by the policy. In addition, we show that these negative impacts close to at-risk plants are compensated by positive impacts further away from the plants, which is consistent with the existence of displacement effects in local housing markets.
The program of the RITM Seminar is here.