Journal of Financial and Quantitative Analysis· 2026Q1
Does the Salience of Climate-Related Risk Affect Asset Prices?
- 8citations
- Q1SCImago
- 2026year
Short summary
California home prices dropped 5.7% for properties newly assigned to a wildfire risk zone, but only further from the boundary, suggesting buyers update beliefs based on actual risk, not immediate salience.
AI-generated from the title and abstract; the full text is not read.
Key points
- California home prices dropped 5.7% for properties in newly assigned wildfire risk zones.
- The price drop was observed further away from the new risk zone boundary, not immediately adjacent.
- Findings suggest buyers update risk beliefs based on rezoning information, not immediate risk salience.
AI-generated from the title and abstract; the full text is not read.
Abstract
Abstract Using regression discontinuity and difference-in-differences designs to compare prices of California homes across a new wildfire risk zone boundary, I identify null effects in the immediate vicinity of the new risk zone boundary. In contrast, prices of homes newly assigned to a riskier zone drop by 5.7% further away from the new risk zone boundary. These findings suggest that households do not respond to the risk salience triggered by the new risk zone assignment. Instead, they update their risk beliefs in response to rezoning in a way that is consistent with the actual wildfire risk.
The authors' abstract, as published at the source. Journal of Financial and Quantitative Analysis, 2026 · DOI ↗
Continue with a free account
Ask the paper: 3 free questions a day about this paper; save it, get its citation, new summaries every day for your field. Takeaways are Premium.
Continue free on the webSign in with Google or Apple; no card needed. You come back to this paper.
On your phone:
Field: Economics and Econometrics
Economics and EconometricsEconomics, Econometrics and Finance