Publication Type

Journal Article

Version

publishedVersion

Publication Date

11-2018

Abstract

We study how information on local (dis)amenities is transmitted and manifested in housing markets. Using nationwide data on multifamily homes in South Korea, we analyze heterogeneity in the effect of a sex offender's presence on sale prices and rents of nearby homes. Our results demonstrate that the price effect of the offender's move-in varies significantly by spatial context. People react more strongly and persistently to the move-in of the offender in places wherein indicators of social connectedness are stronger, such as places with relatively low population density. We also find that, unlike housing prices, rents do not change in response to the move-in of a sex offender. These heterogeneous housing market responses may be attributed to better acquisition of and higher sensitivity to information on local (dis)amenities among (potential) members in highly connected communities, particularly among homeowners. We interpret our findings as suggestive evidence that social capital and social networks are important sources of information on local (dis)amenities.

Keywords

Crime risk Megan's law, Housing price, Spatial context, Social connectedness

Discipline

Behavioral Economics | Real Estate | Urban Studies and Planning

Research Areas

Applied Microeconomics

Publication

Journal of Urban Economics

Volume

108

First Page

1

Last Page

17

ISSN

0094-1190

Identifier

10.1016/j.jue.2018.09.001

Publisher

Elsevier

Copyright Owner and License

Publisher

Additional URL

https://doi.org/10.1016/j.jue.2018.09.001

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