Unveiling housing preferences amidst flood risks: an empirical study in an emerging market

Hong Thi Bich Nguyen and Hiep Thanh Truong

International Journal of Housing Markets and Analysis, 2024, vol. 19, issue 1, 267-284

Abstract: PurposeThis study investigates the interplay between flood risk, financial constraints and buyer behavior in the housing market. It aims to discern how flood experience influences housing choices, particularly among financially constrained buyers.Design/methodology/approachUsing hedonic pricing models and probit analysis, this research examines the implicit prices of house characteristics and evaluates the determinants of housing choices, considering factors such as flood risk, financial status and past flood experience.FindingsThe study underscores that lower house prices incentivize buyers to opt for homes in flood-prone areas, thereby increasing their vulnerability to flood risks. Consequently, financial constraints exacerbate this situation, compelling low-income buyers to accept higher flood risks. However, flood experience fosters risk awareness among buyers, encouraging them to steer clear of flood-prone areas, albeit with lesser efficacy among financially constrained individuals.Originality/valueThis research contributes to the understanding of how flood risk and financial limitations shape housing decisions. It highlights the role of flood experience in influencing buyer behavior and emphasizes the need for targeted policies to mitigate flood-related risks in the housing market, particularly among economically vulnerable populations.

Keywords: Buyer behavior; Flood risk; Financial constraints; Housing market; Climate change adaptation; Flood experience (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-06-2024-0079

DOI: 10.1108/IJHMA-06-2024-0079

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