- Published
- 2021-03-20
- Venue
- Review of Financial Studies, vol. 34, no. 8, pp. 3527-3571
- Cited by
- 418
- Open access
- No free copy found
- DOI
- 10.1093/rfs/hhab032
Abstract
We show that housing markets provide information about the appropriate discount rates for valuing investments in climate change abatement. Real estate is exposed to both consumption and climate risk and its term structure of discount rates is downward sloping, reaching 2.6% for payoffs beyond 100 years. We use a tractable asset pricing model that incorporates features of climate change to show that the term structure of discount rates for climate-hedging investments is thus upward sloping but bounded above by the risk-free rate. At horizons at which risk-free rates are unavailable, the estimated housing discount rates provide an upper bound.
Cite this paper
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- APA 7
Giglio, S., Maggiori, M., Rao, K., Stroebel, J., & Weber, A. (2021). Climate Change and Long-Run Discount Rates: Evidence from Real Estate. Review of Financial Studies, 34(8), 3527–3571. https://doi.org/10.1093/rfs/hhab032
- MLA 9
Giglio, Stefano, et al. "Climate Change and Long-Run Discount Rates: Evidence from Real Estate." Review of Financial Studies, vol. 34, no. 8, 2021, pp. 3527–3571, https://doi.org/10.1093/rfs/hhab032.
- Chicago
Giglio, Stefano, Matteo Maggiori, Krishna Rao, Johannes Stroebel, and Andreas Weber. "Climate Change and Long-Run Discount Rates: Evidence from Real Estate." Review of Financial Studies 34, no. 8 (2021): 3527–3571. https://doi.org/10.1093/rfs/hhab032.
- GOST
Giglio S., Maggiori M., Rao K. [и др.] Climate Change and Long-Run Discount Rates: Evidence from Real Estate // Review of Financial Studies. — 2021. — Vol. 34, № 8. — P. 3527–3571. — URL: https://doi.org/10.1093/rfs/hhab032
- BibTeX
@article{giglio2021climate, title = {{Climate Change and Long-Run Discount Rates: Evidence from Real Estate}}, author = {Stefano Giglio and Matteo Maggiori and Krishna Rao and Johannes Stroebel and Andreas Weber}, journal = {Review of Financial Studies}, year = {2021}, volume = {34}, number = {8}, pages = {3527--3571}, doi = {10.1093/rfs/hhab032}, url = {https://doi.org/10.1093/rfs/hhab032} }- RIS
TY - JOUR AU - Giglio, Stefano AU - Maggiori, Matteo AU - Rao, Krishna AU - Stroebel, Johannes AU - Weber, Andreas TI - Climate Change and Long-Run Discount Rates: Evidence from Real Estate JO - Review of Financial Studies VL - 34 IS - 8 SP - 3527 EP - 3571 PY - 2021 DA - 2021/03/20 DO - 10.1093/rfs/hhab032 UR - https://doi.org/10.1093/rfs/hhab032 ER -