Green pastures: Do US real estate prices respond to population health?

Abstract

We investigate whether communities with improving population health will subsequently experience rising real estate prices. Home price indices (HPIs) for 371 MSAs from 1990 to 2010 are regressed against life-expectancy five years prior. HPIs come from the Federal Housing Finance Agency. Life expectancy estimates come from the Institute of Health Metrics. Our analysis uses random and fixed effect models with a comprehensive set of controls. Life expectancy predicted increases in the HPI controlling for potential confounders. We found that, this effect varied spatially. Communities that invest their revenue from property taxes in public health infrastructure could benefit from a virtuous cycle of better health leading to higher property values. Communities that do not invest in health could enter vicious cycles and this could widen geospatial health and wealth disparities.