Pricing Adverse Flood Risk: Heterogeneity Across Opportunity and Suffering Sectors, 2026
Abstract: There exist industries that can benefit even from a clearly adverse risk like flooding, leading to differential household risk pricing. This paper examines household valuation of flood risk, with a focus on industry-driven heterogeneity. Using a nested multispatial sorting model that accounts for household location choice, I show that households in Opportunity Sectors, where floods can generate economic benefits, exhibit lower willingness to pay (WTP) for risk reduction than households in Suffering Sectors, where floods are costly. With the novel industry channel incorporated, the well-documented divergences across income levels are largely explained by sectoral dynamics, with no evidence of the reverse effect. This provides a critical underlying mechanism for heterogeneity in climate risk valuation and the resulting inequality. The findings have important implications for household location decisions, flood risk pricing, WTP-based policy, and environmental injustice.
High-Temperature, Climate Adaptation, and Mortgage Prepayment, with Yongheng Deng, Teng Li, and Timothy Riddiough, 2026
Abstract: We study how high temperatures affect mortgage prepayment in the U.S. Using 482,000 private-label mortgages matched with NOAA weather and Equifax credit data, we show that persistent exposure to unusually high temperatures increases prepayment, but only among households with sufficient home equity. A one-standard deviation increase in high-temperature days raises prepayment by 3.5-4.0 percent, with effects six times larger in high–climate-risk counties. We identify a housing-location mismatch channel: exposed households are more likely to relocate and move to cooler, less disaster-prone areas. We document climate-driven spatial adaptation as an additional mortgage-termination channel operating alongside traditional refinancing and life-event motives.
Estimating Benefits and Costs of Land Development, with Lu Han, Christopher Timmins, and Vincent Yao, 2026
Abstract: We estimate the benefits and costs associated with land development using a unified framework. By employing a shift-share instrument and its interaction with the indicator for areas with high flood risk exposure, we find that expected benefits significantly and positively impact home prices, while expected costs have a significant and negative effect. There is also a significant spillover effect on local home prices from nearby land development. Residents in Republican-leaning states value the expected benefits more and discount the costs. Underserved areas, with higher proportions of minorities and lower median incomes, receive lower net benefits compared to other areas, mainly due to lower benefits from nearby land development rather than higher costs.
The Effectiveness and Consequences of the Government’s Interventions for Hong Kong’s Residential Housing Markets, with Yongheng Deng, Teng Li, and Yonglin Wang. Real Estate Economics, 52(2), 324-365. Jan 2024.
Abstract: We study the effectiveness, consequences, and transmission mechanisms of the government's interventions for Hong Kong's residential housing market between 2009 and 2017. We use granular microlevel transaction data and adopt a regression discontinuity design to conduct the empirical analysis. We find that mortgage-tightening measures effectively curbed the overheated market by reducing price and volume while specific submarkets occasionally experienced volatility. Tax-driven measures effectively suppressed trading activity but triggered price volatilities across submarkets. Several rounds of measures had a spillover effect on subsidized public housing. Our findings have implications for policymakers seeking to review and revise property market intervention policies in Hong Kong and elsewhere.
Climate Change and Mortgage Market: Loan Origination and Securitization
Understanding Missing Data in Real-Time Pollution Monitoring System in China