The Marginal Cost of Mortality Risk Reduction: Evidence from Housing Markets
We provide the first evidence that spatial variation in all-cause mortality risk is capitalized into US housing prices. Using a hedonic framework, we recover the annual implicit cost of a 0.1 percentage-point reduction in mortality risk among older Americans and find that this figure is both relatively low and decreasing in age, from $1,346 for a 67 year old to $246 for an 87 year old. These estimates are one-fifth of the size of comparable estimates found in the labor market, suggesting that the housing market provides an alternative, substantially cheaper channel to reducing mortality risk.
Kelly C. Bishop & Nicolai V. Kuminoff & Sophie M. Mathes & Alvin D. Murphy, 2024. "The marginal cost of mortality risk reduction: Evidence from housing markets," Journal of Urban Economics, vol 139.