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  3. American Economic Review
  4. February 2020
  5. Loss in the Time of Cholera: Long-Run Impact of a Disease Epidemic on the Urban Landscape

Loss in the Time of Cholera: Long-Run Impact of a Disease Epidemic on the Urban Landscape

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Abstract

How do geographically concentrated income shocks influence the long-run spatial distribution of poverty within a city? We examine the impact on housing prices of a cholera epidemic in one neighborhood of nineteenth century London. Ten years after the epidemic, housing prices are significantly lower just inside the catchment area of the water pump that transmitted the disease. Moreover, differences in housing prices persist over the following 160 years. We make sense of these patterns by building a model of a rental market with frictions in which poor tenants exert a negative externality on their neighbors. This showcases how a locally concentrated income shock can persistently change the tenant composition of a block.

Citation

Ambrus, Attila, Erica Field, and Robert Gonzalez. 2020. "Loss in the Time of Cholera: Long-Run Impact of a Disease Epidemic on the Urban Landscape." American Economic Review, 110 (2): 475-525. DOI: 10.1257/aer.20190759

Additional Materials

JEL Classification

  • D62 Externalities
  • O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
  • R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
  • R31 Housing Supply and Markets