 Seismic risk and house prices: Evidence from earthquake fault zoningRuchi Singh Regional Science and Urban Economics, 2019, vol. 75, issue C, 187-209 Abstract: In 1972, the Alquist-Priolo Zoning Act provided for the publication of earthquake fault maps in California. I exploit revisions in these official maps over time to estimate the rate of capitalization of seismic risk into property values using a difference-in-differences framework. Using geographically consistent data from 1970 to 2010 at the census tract level, I find that on average property values decline by 6.6 percent after the delineation of the fault zone, while rents decline by around 3.3 percent. I also examine the risk gradient and heterogeneity in willingness to pay using individual sales transactions, assessors' records, and publicly available mortgage data for the City of Los Angeles. The analysis of micro transactions data from 1997 to 2016 reveals that, on average, house prices increase by 1.8 percent for a one-mile increase in distance from the fault zone. The evidence also indicates that holding income and gender constant, Blacks and Hispanics are less willing than Whites to trade other forms of consumption to avoid earthquake risk. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:75:y:2019:i:c:p:187-209 DOI: 10.1016/j.regsciurbeco.2019.02.001 Access Statistics for this article Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou More articles in Regional Science and Urban Economics from Elsevier |
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