Hedonic Analysis of the Impact of Flood Events on Residential Property Values in Malaysia: A Study of Willingness to Pay

Nur Hafizah Ismail (), Mohd Karim and Bakti Hasan-Basri
Additional contact information
Nur Hafizah Ismail: School of Economics, Finance and Banking, Universiti Utara Malaysia

Malaysian Journal of Economic Studies, 2019, vol. 56, issue 1, 63-84

Abstract: The effect of flooding on residential property values (RPV) is a major concern to all property buyers and owners. Although numerous studies have already discussed the risk of devaluation of those properties situated in flood prone areas, those that focused on the impact of flooding on residential properties in Malaysia are still limited. This paper extends existing literature by also estimating consumers’ willingness to pay for flood control measures to reduce the flood risk in Malaysia. Using the hedonic pricing model (HPM), our results suggest that the market value of urban and rural residential properties significantly decreases by 18.5 percent and 13.6 percent due to flooding, respectively. The result also shows that, respondents who are risk averse are willing to pay 35.4 percent more for flood control measures to reduce impact of flood risk compared to those who are risk takers. The results of this study can help property owners to understand the factors that contribute to property devaluation due to flooding. This study also proposes flood insurance programmes to be implemented as flooding is a major concern to real property owners.

Keywords: Floods; hedonic price model; property; valuation (search for similar items in EconPapers)
JEL-codes: Q54 R21 R32 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:mjr:journl:v:56:y:2019:i:1:p:63-84

DOI: 10.22452/MJES.vol56no1.4

Access Statistics for this article

Malaysian Journal of Economic Studies is currently edited by Lim Kian Ping

More articles in Malaysian Journal of Economic Studies from Faculty of Business and Economics, University of Malaya & Malaysian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Malaysian Economic Association ().