Water-depletion and single-state municipal bond fund risk. Issue 2 (5th June 2017)

• Record Type: Journal Article
• Authors: Álvarez, Marta; Rodriguez, Javier
• Is Part Of: Studies in economics and finance. Volume 34:Issue 2(2017)
• Page Start: 228
• Page End: 237
• Publication Date: 2017-06-05
• Subjects: Water resources -- Municipal bonds -- Mutual funds risk; Economics -- Periodicals; Finance -- Periodicals; 330
• DOI: 10.1108/SEF-02-2016-0038
• Languages: English
• ISSNs: 1086-7376

Abstract

Abstract : Purpose: The purpose of this paper is to investigate the relationship between single-state municipal bond fund risk and water scarcity in the USA. Design/methodology/approach: The authors compare the risk profiles of funds from states with limited water resources with those from states without this issue. Findings: The authors find that, as expected, funds from southern and western states, which suffer from water scarcity, are riskier than funds from other regions within the mainland USA. Although this study is concerned with which funds are riskier, it is noted that funds from the northeast are significantly less risky than funds from other regions. Originality/value: Due to limited water resources, crumbling water infrastructure and continuous water-rights legal battles, water resources in the USA have become a highly sought-after commodity. In this study, we contribute to the discussion on the many repercussions of water scarcity on financial assets.