The effect of seismic hazard risk information on property prices: Evidence from a spatial regression discontinuity design

Noboru Hidano, Tadao Hoshino, Ayako Sugiura

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

In this paper, we utilize a spatial two-dimensional regression discontinuity (RD) design to study how Tokyo's property market evaluates information on seismic hazard risk. This approach is superior to the conventional one-dimensional RD design as it is able to account for spatially heterogeneous treatment effects and reduce small-sample biases. Our data consists of residential property transactions from the 23-ward area of Tokyo. Our results show that the unit prices of residential properties in low-risk zones were between 13,970-17,380 JPY higher than those in high-risk zones depending on the type of seismic hazard risk. In addition, we find that information on seismic hazard risk does not significantly affect the prices of newly constructed apartments, which are more resistant to earthquake damage than older residences.

Original languageEnglish
Pages (from-to)113-122
Number of pages10
JournalRegional Science and Urban Economics
Volume53
DOIs
Publication statusPublished - 2015 Jul 1

Keywords

  • Hedonic price
  • Property market
  • Quasi-experiment
  • Regression discontinuity design
  • Seismic hazard risk

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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