The Costs of Hedging Disaster Risk and Home Prices: Evidence from Flood Insurance DOI

Shan Ge,

Ammon Lam,

Ryan Lewis

et al.

SSRN Electronic Journal, Journal Year: 2022, Volume and Issue: unknown

Published: Jan. 1, 2022

We use flood insurance to study how the costs of hedging natural disaster risk changes home prices. The Biggert--Waters Act mandated premium increases that affected properties discontinuously around high boundary based on timing construction. Utilizing a triple-difference design, we estimate $1 relative increase in annual premiums causes reduction $102 effect is much larger for areas are exposed future flooding from sea level rise, indicating pricing can accelerate incorporation climate asset markets. Our results contrast prior literature, which finds little values, and have important implications policymakers considering another revamp methodologies.

Language: Английский

Climate Stress Testing DOI Creative Commons
Viral V. Acharya, Richard Berner, Robert F. Engle

et al.

Annual Review of Financial Economics, Journal Year: 2023, Volume and Issue: 15(1), P. 291 - 326

Published: Oct. 3, 2023

We explore the design of climate stress tests to assess and manage macroprudential risks from change in financial sector. review scenarios currently employed by regulators, highlighting need ( a) consider many transition as dynamic policy choices, b) better understand incorporate feedback loops between economy, c) further compound risk which co-occur with other risks. discuss how process mapping into firm outcomes can existing evidence on effects various climate-related credit market outcomes. argue that more research is required identify channels through plausible lead meaningful short-run impact given typical bank loan maturities, bank-lending responses risks, adequacy pricing markets, d) participants form expectations affects stability. Finally, we advantages disadvantages using market-based be conducted publicly available data complement stress-testing frameworks.

Language: Английский

Citations

50

Political Polarization Affects Households' Financial Decisions: Evidence from Home Sales DOI
W. Ben McCartney,

John Orellana-Li,

Calvin Zhang

et al.

The Journal of Finance, Journal Year: 2024, Volume and Issue: 79(2), P. 795 - 841

Published: Feb. 11, 2024

ABSTRACT Political identity and partisanship are salient features of today's society. Using deeds records voter rolls, we show that current residents more likely to sell their homes when opposite‐party neighbors move in nearby than unaffiliated or same‐party do. This is especially true the new politically active, consistent with an animosity between parties mechanism. We conclude affective polarization not limited purely political settings affects one household's most important financial decisions, home transactions.

Language: Английский

Citations

25

Shaping sustainability: How corporate reputation can be enhanced under climate change conditions DOI
Junyu Pan, Ahmed Imran Hunjra, Maria Giuseppina Bruna

et al.

Finance research letters, Journal Year: 2024, Volume and Issue: 62, P. 105174 - 105174

Published: Feb. 29, 2024

Language: Английский

Citations

18

Climate policy uncertainty and the cross-section of stock returns DOI Creative Commons
Sirimon Treepongkaruna, Kam Fong Chan, Ihtisham Malik

et al.

Finance research letters, Journal Year: 2023, Volume and Issue: 55, P. 103837 - 103837

Published: March 30, 2023

We show that climate policy uncertainty (CPU) is priced cross-sectionally in individual stocks. On average, the risk-adjusted annual future returns of stocks with low exposure to CPU are 5.5%–6.3% higher than those high exposure. This finding consistent Merton's (1973) intertemporal CAPM where uncertainty-averse investors willing pay prices and accept lower for CPU-sensitive Low CPU-beta firms primarily value crash risk, they have under Democratic presidencies. Finally, we develop a novel factor, it outperforms size factors.

Language: Английский

Citations

37

Physical climate risk attention and dynamic volatility connectedness among new energy stocks DOI
Xu Gong, Qin Liao

Energy Economics, Journal Year: 2024, Volume and Issue: 136, P. 107711 - 107711

Published: June 10, 2024

Language: Английский

Citations

14

When climate meets real estate: A survey of the literature DOI Creative Commons
Justin Contat,

Carrie Hopkins,

Luis Mejia

et al.

Real Estate Economics, Journal Year: 2024, Volume and Issue: 52(3), P. 618 - 659

Published: April 15, 2024

Abstract With near unanimity, climate scientists project natural disasters to increase in frequency, severity, and geographic scope over the next century. We survey academic literature at intersection of these risks real estate. Our review physical includes price, loan performance, migratory effects stemming from flooding, wildfires, sea level rise. transition risks, including energy use decarbonization, as they relate Where possible, we explain how topics may intersect with housing affordability, especially historically disadvantaged communities. conclude by highlighting critical areas for future research.

Language: Английский

Citations

12

The role of AI capabilities in environmental management: Evidence from USA firms DOI
Anqi Jiao,

Juntai Lu,

Honglin Ren

et al.

Energy Economics, Journal Year: 2024, Volume and Issue: 134, P. 107653 - 107653

Published: May 21, 2024

Language: Английский

Citations

11

Do salient climatic risks affect shareholder voting? DOI Creative Commons
Eliezer M. Fich, Guosong Xu

Review of Finance, Journal Year: 2025, Volume and Issue: unknown

Published: Jan. 16, 2025

Abstract Institutional investors affected by hurricanes subsequently support environmental proposals in non-affected firms even if they never voted for similar initiatives. Affected raise their holdings where pro-environment votes are consequential. The increased voting after has real effects as endorsed more hurricane-afflicted likely to pass. Moreover, both market capitalization and analysts’ recommendations decline pass proposals. Our evidence suggests that natural disasters institutional investors’ concerns about the environment potential fund flow disruptions. These concerns, turn, influence activism, corporate policies, firm performance.

Language: Английский

Citations

1

Ex-ante litigation risk and firm-level climate-change exposure DOI
Ashrafee T Hossain, Hatem Rjiba, Dongyang Zhang

et al.

Journal of Economic Behavior & Organization, Journal Year: 2023, Volume and Issue: 214, P. 731 - 746

Published: Sept. 6, 2023

Language: Английский

Citations

16

Does climate policy uncertainty influence corporate cash holdings? Evidence from the U.S. tourism and hospitality sector DOI Open Access
Lei Zhang, Jing Gao

Tourism Economics, Journal Year: 2024, Volume and Issue: 30(7), P. 1704 - 1728

Published: Jan. 3, 2024

We examine the influence of climate policy uncertainty (CPU) on corporate cash holding decisions U.S. tourism and hospitality firms. find that CPU is negatively associated with holdings for firms in United States. A further analysis indicates impact lasts 2 years disappears afterward. also show hotel firms, but its impacts airline, restaurant, casino are insignificant. Results from cross-sectional analyses financial constraints risk exposure moderate relationship between holdings. Our main findings insensitive to additional robustness tests, including an instrumental variable test subsample analyses. results have timely implications academics, investors, regulators.

Language: Английский

Citations

5