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Economic Effects of Environmental Crises: Evidence from Flint, Michigan

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  • Peter Christensen
  • David A. Keiser
  • Gabriel E. Lade

Abstract

In April 2014 Flint, Michigan switched its drinking water supply from the Detroit water system to the Flint River as a temporary means to save $5 million. Over 18 months it was revealed that the switch exposed residents to dangerous levels of lead, culminating in an emergency declaration in October 2015. This paper examines the impact of this crisis on the Flint housing market. The value of Flint's housing stock has fallen by $520 million to $559 million despite over $400 million in remediation spending. Home prices remain depressed through August 2019, 16 months after the water was declared safe for consumption.

Suggested Citation

  • Peter Christensen & David A. Keiser & Gabriel E. Lade, 2023. "Economic Effects of Environmental Crises: Evidence from Flint, Michigan," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 196-232, February.
    • Handle: RePEc:aea:aejpol:v:15:y:2023:i:1:p:196-232
    DOI: 10.1257/pol.20190391
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    References listed on IDEAS

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    1. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
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    Citations

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    Cited by:

    1. Marcus, Michelle & Mueller, Rosie, 2024. "Unregulated contaminants in drinking water: Evidence from PFAS and housing prices," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    2. Bishop, Kelly C. & Kuminoff, Nicolai V. & Mathes, Sophie M. & Murphy, Alvin D., 2024. "The marginal cost of mortality risk reduction: Evidence from housing markets," Journal of Urban Economics, Elsevier, vol. 139(C).
    3. Jerch, Rhiannon L. & Phaneuf, Daniel J., 2024. "Cities and water quality," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    4. Wichman, Casey, 2024. "Efficiency, Equity, and Cost-Recovery Trade-Offs in Municipal Water Pricing," RFF Working Paper Series 24-18, Resources for the Future.

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    More about this item

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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