Tornado shelters and the housing market

Kevin Simmons and Daniel Sutter

Construction Management and Economics, 2007, vol. 25, issue 11, 1119-1126

Abstract: Mitigation against natural hazards often involves long-lived, immobile investments. Home owners must be able to capture the present value of future benefits to equate the private and societal return on mitigation. The capitalization of mitigation into home prices thus is crucial for home owners to have a proper incentive for mitigation. We investigate the existence of a premium for tornado shelters using home sales in Oklahoma City, where the deadly tornado outbreak of 3 May 1999 and the Oklahoma Saferoom Initiative increased public awareness of tornado shelters. We find that a shelter increases the sale price of a home by 3.5% to 4% or approximately $4200 given the mean price of homes sold in 2005. The magnitude of the premium is plausible given that shelters retail for $2500-$3000 installed.

Keywords: Natural disasters; prices; tornado shelters; mitigation; multiple regression (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/01446190701618299 (text/html)
Access to full text is restricted to subscribers.

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:taf:conmgt:v:25:y:2007:i:11:p:1119-1126

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCME20

DOI: 10.1080/01446190701618299

Access Statistics for this article

Construction Management and Economics is currently edited by Will Hughes

More articles in Construction Management and Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().