Abstract: As climate change accelerates, the Western U.S. is expected to experience more frequent and severe droughts. This looming crisis underscores the need to understand how households may adapt. In this study, Mingzhou applies a residential sorting model to examine how drought-induced water shortages influence household location choices in the region. His findings are multifaceted: First, households experience significant disutility from living outside their birth states, with preference varying by demographics. Second, water shortages influence household location decisions by both lowering utility and raising rents. This prompts households to relocate to areas where higher net incomes and other desirable amenities can offset these adverse effects. Third, households are willing to pay $0.12 to avoid an additional gallon of unmet water demand annually, with elderly households and homeowners willing to pay more. His study emphasizes the crucial role of megadroughts in shaping population distribution in the Western U.S.
Bio: Mingzhou Shen is a fifth-year Ph.D. candidate in Energy, Environmental, and Food Economics at Pennsylvania State University. His research investigates the impact of environmental risks and policies on labor and housing markets, with a specific emphasis on the effects of building moratoria on the housing crisis in California. Additionally, it explores how drought conditions in the Western U.S. shape household location decisions. Prior to his Ph.D., Mingzhou worked with the Food and Agriculture Organization of the United Nations in Rome, Italy. He holds both a Master's and Bachelor's degree in Civil Engineering from Zhejiang University, China.