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The cost of floods in developing countries’ megacities: A hedonic price analysis of the Jakarta housing market, Indonesia

José Cobián Álvarez and Budy Resosudarmo ()

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Although many megacities in developing countries experience floods that affect a large number of people, relatively few empirical studies have evaluated the costs involved. This paper estimates such costs by conducting a hedonic price analysis of the impacts of floods on the housing market in Jakarta. A robust regression technique on a simple linear transformation model, and a maximum likelihood estimation technique on the spatial lag version of the simple linear transformation model are utilized to estimate the correlation between the level of the 2007 floods and monthly housing rental prices in Jakarta, Indonesia. This paper concludes that in developing countries’ megacities the total cost of floods is not as considerable as the total estimated cost of making the city of Jakarta floodfree

Keywords: Environmental economics; hedonic price analysis; spatial analysis; flood. (search for similar items in EconPapers)
JEL-codes: Q51 Q54 R32 O21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env, nep-sea and nep-ure
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2018-05

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