Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309187 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. WP 2024-25
Publisher: 
Federal Reserve Bank of Chicago, Chicago, IL
Abstract: 
In response to private insurers' postwar withdrawal from urban neighborhoods, roughly half of US states developed programs in the late 1960s that offered residual property insurance to property owners denied in the private market. These plans, known as Fair Access to Insurance Requirements (FAIR) plans after 1968, inadvertently encouraged moral hazard through underwriting restrictions, risk pooling, and generous payouts. We use a triple-difference design to estimate FAIR's impact, comparing: (1) pre- and post-FAIR participation periods, (2) neighborhoods likely offered FAIR plans versus those not, and (3) similar contrasts in non-participating states. FAIR plans led to significant housing disinvestment and declines in central neighborhood population and income in the late 1960s and 1970s.
Subjects: 
Arson
Housing disinvestment
Moral hazard
Neighborhoods
Property insurance
JEL: 
G52
N92
R31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.