Drought and Property Prices: Empirical Evidence from Provinces of Iran

摘要

This study examines the effect of drought on housing and residential land prices in Iran. Using panel data covering the 2006-2015 period for 31 provinces of Iran and applying a dynamic system and the difference Generalized Methods of Moments (GMM) methods, we find that an increase in the balance of water (reducing the severity of drought) within provinces has a positive effect on property prices. Our results are robust, controlling for province fixed effects, time trend, and a set of control variables that may affect property prices.