The effect of flood risk information on property values around Paris

Edwige Dubos-Paillard (), Emmanuelle Lavaine () and Katrin Millock ()
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Edwige Dubos-Paillard: GC (UMR_8504) - Géographie-cités - UP1 - Université Paris 1 Panthéon-Sorbonne - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne
Emmanuelle Lavaine: CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, UM - Université de Montpellier
Katrin Millock: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: The paper examines the effect of flood risk regulation on property prices in the inner suburbs of Paris, France, over the period 2003 to 2012. We use unique data on property transactions and geo-localised amenities from a major European city exploiting the different dates of implementation of the flood risk zone regulation. Using an identification strategy based on a difference-in-differences specification, the results indicate that home prices for similar real estate are 3 to 7% lower when located in a flood risk zone, depending on the sub market (flats or houses). The discount is higher, the higher is the flood risk designated by the regulation. Buyers' previous exposure to floods reduces the price discount.

Keywords: natural hazards; COM; PARIS team; housing market; flood risk; difference in differences estimation; amenity value (search for similar items in EconPapers)
Date: 2019-03
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Published in European Conference on Risk Perception, Behaviour, Management and Response, Mar 2019, Cergy-Pontoise, France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-02118020

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