This dissertation examines the interplay between environmental disasters, renewable energy development, and housing markets through three interconnected chapters. Using quantitative methods and geospatial databases, I present empirical evidence on the economic and social consequences of environmental challenges and the transition to renewable energy. The findings contribute to a better understanding of the challenges and opportunities in developing effective, equitable, and sustainable disaster mitigation efforts and environmental policies.
Chapter 1 is motivated by the reality that environmental disasters increasingly displace people worldwide with little warning. The rapid expansion of the sharing economy has created a new source of short-term housing for those affected. This chapter investigates the welfare impacts of home sharing for short-term displacement caused wildfires in the Los Angeles area. I develop a structural model of the home-sharing market that accounts for information asymmetry between customer types (disaster evacuees versus regular travelers), identifying two welfare channels: the increased choice of housing options and altruistic sharing by hosts. The results suggest that home sharing can mitigate 52% of welfare loss due to displacement, with host generosity contributing one-quarter of this reduction. My analysis highlights the equity benefits unlocked by home sharing, as altruistic behavior is primarily carried out by better-off hosts as indicated by demographic and home characteristics. The study also proposes a platform targeting displaced individuals to improve the efficiency and equity of mitigation efforts. The findings speak to the fundamental question of economics on the role of market economy and technology innovation in enhancing emergency response and recovery.
Chapter 2, co-authored with Yanjun (Penny) Liao and Qing Miao, addresses the challenges coastal communities face in limiting population and property exposure to increasing disaster risks while maintaining a strong local economy. This dilemma is often apparent in government buyout and acquisition programs, which offer financial incentives for households to voluntarily relocate from at-risk properties. This chapter examines a major post-disaster buyout and acquisition initiative implemented by New York state after Hurricane Sandy, and its effects on a wide range of property-level and community-level changes. Our results indicate that acquisitions and buyouts can increase property values in the immediate area and enhance business outcomes in the broader neighborhood. Consequently, these neighborhood improvements attract different types of property buyers. By offering the first estimates on general equilibrium effects spilling over to a larger portion of the neighborhoods, our findings contribute to ongoing debates on managed retreat and provide a more comprehensive perspective.
Chapter 3, in collaboration with Maximilian Auffhammer and Leonie Wenz, addresses the contentious issue that renewable power, while increasingly important for its environmental benefits, may impose externalities on local residents. This chapter assesses the social costs of wind power generation in the US, focusing on its impact on property values due to visual disamenity. We construct a geospatial database on wind turbine visibility nationwide and use a spatial difference-in-difference approach to estimate the impact of wind turbine visibility on housing prices. Results indicate that wind farm developments reduce property values by up to 8% in visible areas of close proximity, primarily in urban neighborhoods. We also explore the adaptation efforts taken by local residents and discuss their implications for future wind farm location decisions. By providing the first nationwide evaluation of the social costs of wind power generation, this study offers essential insights for ongoing debates on the equity implications of renewable energy development.
