The impact of flood dynamics on property values

Darshana Rajapaksa, Min Zhu, Boon Lee, Viet-Ngu Hoang, Clevo Wilson () and Shunsuke Managi

Land Use Policy, 2017, vol. 69, issue C, 317-325

Abstract: There is evidence that environmental amenities and dis-amenities may be nonlinearly related to property valuation. This would bring inconsistency in estimating environmental variables of the hedonic price model. To explore the linearity of the relationship this study analyses spatial and temporal variation impacts of the 2011 Brisbane flood on property markets using semi-parametric estimation. The results show that most environmental variables impacts on property values nonlinearly, and in particularly distance to the river, indicating that the amenity value of being close to a river outweighs the flood risks. The estimation of the combined impact of elapsed time and neighbourhood income indicates that the flood risk impact on property markets disappears over time.

Keywords: Flood risk; Temporal behaviour; Nonlinearity; Property market; Semi-parametric analysis; Spatial impact (search for similar items in EconPapers)
JEL-codes: Q51 Q54 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:69:y:2017:i:c:p:317-325

DOI: 10.1016/j.landusepol.2017.08.038

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