The effect of flood risk on house prices in the Basque Country

Patricia Menéndez, Maria Jesús Bárcena, María Cristina González and Fernando Tusell

Journal of Housing Economics, 2024, vol. 66, issue C

Abstract: We analyze property prices, including both sales and rents, in relation to climate change-associated flood risk arising from sea level rise and river overflow. Our body of evidence consists of sale and rent offered prices in the Basque Country from 2007 to 2017, totaling over 329,000 observations. Our quantitative methods depart from those in other studies by using the ratio of sale to rent prices, deemed more likely to reflect the effects we are investigating. We use geographically weighted regression (GWR) with neighborhoods tailored to risk areas. Our findings provide some evidence of risk capitalization, although limited to areas of higher risk.

Keywords: Flood risk; House prices; Rent prices; Climate change; Spatio temporal data (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:66:y:2024:i:c:s105113772400041x

DOI: 10.1016/j.jhe.2024.102022

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