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Working Paper
Natural Disasters and Real Asset Prices: What Can We Learn From Tornados?
Tornados’ impacts on real asset prices have not been extensively explored in a causal analysis framework. We estimate the effects of damage from a major tornado in Little Rock, AR on prices of nearby non-damaged residential real assets. We study how a typical home’s proximity to damaged properties might have led to a discount in the price of the subject property due to blight in the neighborhood. We focus on homes that sold between January 2022 and August 2024, and compare the effects of the March 31, 2023 tornado on sale prices for homes near versus far from damaged houses. For homes ...