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Urban and Regional Economics Seminars

The Price of Indoor Air Pollution: Evidence from Radon Maps and the Housing Market

Nikodem Szumilo (UCL)

Friday 13 March 2020 13:00 - 14:30

32L 1.04, 1st Floor Conference Room, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH

About this event

This paper uses the property market to examine the magnitude of indoor air pollution costs. We focus on radon, an indoor air pollutant which is the largest source of exposure to natural ionising radiation and the leading cause of lung cancer after smoking. To overcome potential confounders we exploit a natural experiment whereby a risk map update in England induces exogenous variation in published radon risk levels. Using a repeat-sales approach we first show that radon risk drives residential property prices of affected properties, but the effect of increasing or decreasing radon risk is not symmetric. Further findings demonstrate that increased radon risk: (i) decreases house prices around directly affected properties via external effects, (ii) increases the number of homes sold locally, and (iii) induces significant changes in neighbourhood composition. We estimate that at least half of the price effects we obtain are driven by resorting of lower income and minority groups into radon affected areas. We interpret our results using a simple matching model. We conclude that the extent and distribution of indoor air pollution costs should be considered alongside those of ambient air pollutants.

This event will take place in 32L 1.04, 1st Floor Conference Room, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.

The building is labelled on the map.

LSE Campus Map

This series is part of the CEP's Urban and spatial programme.