Wildfire and house prices: A synthetic control case study of Altadena (Jan 2025)
Fuente:
arXiv
Saved in:
| Main Author: | |
|---|---|
| Format: | Preprint |
| Published: |
2025
|
| Subjects: | |
| Online Access: | |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1866918172546826240 |
|---|---|
| author | Sun, Yibo |
| author_facet | Sun, Yibo |
| contents | This study uses the Synthetic Control Method (SCM) to estimate the causal impact of a January 2025 wildfire on housing prices in Altadena, California. We construct a 'synthetic' Altadena from a weighted average of peer cities to serve as a counterfactual; this approach assumes no spillover effects on the donor pool. The results reveal a substantial negative price effect that intensifies over time. Over the six months following the event, we estimate an average monthly loss of $32,125. The statistical evidence for this effect is nuanced. Based on the robust post-to-pre-treatment RMSPE ratio, the result is statistically significant at the 10% level (p = 0.0508). In contrast, the effect is not statistically significant when measured by the average post-treatment gap (p = 0.3220). This analysis highlights the significant financial risks faced by communities in fire-prone regions and demonstrates SCM's effectiveness in evaluating disaster-related economic damages. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2510_22817 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Wildfire and house prices: A synthetic control case study of Altadena (Jan 2025) Sun, Yibo General Economics Economics This study uses the Synthetic Control Method (SCM) to estimate the causal impact of a January 2025 wildfire on housing prices in Altadena, California. We construct a 'synthetic' Altadena from a weighted average of peer cities to serve as a counterfactual; this approach assumes no spillover effects on the donor pool. The results reveal a substantial negative price effect that intensifies over time. Over the six months following the event, we estimate an average monthly loss of $32,125. The statistical evidence for this effect is nuanced. Based on the robust post-to-pre-treatment RMSPE ratio, the result is statistically significant at the 10% level (p = 0.0508). In contrast, the effect is not statistically significant when measured by the average post-treatment gap (p = 0.3220). This analysis highlights the significant financial risks faced by communities in fire-prone regions and demonstrates SCM's effectiveness in evaluating disaster-related economic damages. |
| title | Wildfire and house prices: A synthetic control case study of Altadena (Jan 2025) |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2510.22817 |