Environmental risk and the anchoring role of mobility rigidities

We analyze the anchoring role of mobility rigidities following a news shock on environmental risk. Using an exhaustive registry of housing transactions in England between 2007 and 2014, we identify the impact of changes in perceived environmental risk by comparing property prices near nuclear facilities to those further away before and after the Fukushima nuclear accident. The average price drop amounts to 4.2%. There is significant heterogeneity, reflecting the different mobility rigidities faced by residents and workers. At-risk areas with highly-mobile labor structure undergo a more substantial price decrease after the catastrophe and an increase in deprivation. Such finding is further supported by the long-term patterns of residential flight after the opening of nuclear plants--a marked rise in deprivation is observed in neighborhoods where labor is mobile.