Climate change and commercial property markets
Bibliographic Data
| ID | 21352886 |
|---|---|
| Authors | David C Ling (0000-0001-9395-0395, Eugene F. Brigham Finance, Insurance and Real Estate Department University of Florida Gainesville Florida USA), Spenser Robinson (0000-0003-4859-3004, Department of Finance and Law Central Michigan University Mount Pleasant Michigan USA, corresponding author), Andrew R Sanderford (Department of Finance University of Virginia Charlottesville Virginia USA), Andrew Sanderford (0000-0003-4301-6670, University of Virginia), Chongyu Wang (0000-0003-3754-2383, Department of Risk Management/Insurance, Real Estate and Legal Studies Florida State University Tallahassee Florida USA) |
| Year | 2024 |
| Volume | 64 |
| Issue | 4 |
| Pages | 1066-1098 |
| Publication date | 2024-09-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Regional Science (JOURNAL) |
| Journal identifiers | ISSN: 0022-4146 • E-ISSN: 1467-9787 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/jors.12717 |
| OpenAlex | W4399782687 |
| Language | EN |
| Citations received | 1 |
| References cited | 62 |
The economic effect of climate hazard events varies by time and by location. This paper investigates how climate shocks to local property markets transmit to capital markets and provides evidence of the extent to which forward‐looking climate risk is capitalized into the public valuations of those property markets. We first quantify the exposure of real estate portfolios to locations that recently experienced climate events ( Event Exposure ). Using an event study framework, we find that, in the post‐event period, a one‐standard‐deviation increase in ex‐ante Event Exposure is associated with a 0.2–1.4 percentage points decrease in quarterly stock returns. Cross‐sectional analyses reveal that differences in return effects can be explained by variation in the extent to which the area focuses on climate change. Similarly, we find that forward‐looking climate risk assessment negatively affects firm valuations only in markets with a focus on climate change. Consistent with these findings, we provide evidence that climate events (shocks) induce retail investors (noise traders) to decrease their stock holdings and that blockholders tend to take the opposite side in these transactions. We also show that conditioning on consumer sentiment helps to explain cross‐sectional variation in the response of stock returns to climate events
Business · Capital market · Climate change · Econometrics · Economics · Event study · Ex-ante · Financial economics · Geography · Monetary economics · Real estate · Stock (firearms) · Finance · Financial Markets and Investment Strategies · Housing Market and Economics · Insurance and Financial Risk Management
Disaster on the horizon
Illiquidity and stock returns
The Importance of Climate Risks for Institutional Investors
Revisiting the social cost of carbon
Warming caused by cumulative carbon emissions towards the trillionth tonne
Do investors care about carbon risk?
Business risk and the emergence of climate analytics
Mortgage default risk
Investor Sentiment in the Stock Market
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,5 |
| Citation span | 2024 - 2024 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |