Earthquakes and House Prices: Evidence from Oklahoma

Ron Cheung, Daniel Wetherell and Stephan Whitaker

No 1631, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: This paper examines the impact of earthquakes on residential property values using sales data from Oklahoma from 2006 to 2014. Before 2010, Oklahoma had only a couple of earthquakes per year that were strong enough to be felt by residents. Since 2010, seismic activity has increased, bring potentially damaging quakes several times each year and perceptible quakes every few days. Using hedonic models, we estimate that prices decline by 3 to 4 percent after a home has experienced a moderate earthquake measuring 4 or 5 on the Modified Mercalli Intensity Scale. Prices can decline up to 9.8 percent after a potentially damaging earthquake with intensity above 6. The correlations between measures of low intensity (MMI 3) quakes and prices are smaller and vary between specifications. Our findings are consistent with the experience of an earthquake revealing a new disamenity and risk which is then capitalized into house values.

Keywords: Earthquakes; house prices; hedonic price analysis; wastewater disposal (search for similar items in EconPapers)
JEL-codes: Q51 Q53 R31 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2016-12-21
New Economics Papers: this item is included in nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.clevelandfed.org/newsroom-and-events/p ... nd-house-prices.aspx Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:1631

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers (Old Series) from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().