54th Congress of the European Regional Science Association: "Regional development & globalisation: Best practices", 26-29 August 2014, St. Petersburg, Russia
In 2001, the AZF plant exploded in Toulouse (France). The accident was unexpected, it strongly damaged local housing and benefited from a wide media coverage. It provides a rare opportunity to analyze the consequences of a shift in risk perception on housing markets and neighborhoods subject to industrial risk. Using a difference-in-difference matching strategy, this paper shows that although transaction prices do not change as a result of this shift, local housing markets are indeed affected. In particular, the vacancy rate increases, and the standard of living in the at-risk areas tends to deteriorate.