Environmental Hazards and Residential Property Values: Evidence from a Major Pipeline Event

Hansen, Julia L.; Benson, Earl D.; Hagen, Daniel A.

doi:10.3368/le.82.4.529

Cited by 58 publications

(37 citation statements)

References 12 publications

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“…It was hypothesised that the disclosure of flood risk map information and the actual flood-incidence-induced effect on the property market disappeared with time or varied inversely with elapsed time (see Lamond, 2008;Bin & Landry, 2013). In order to test this hypothesis, the spatial HP model was extended to incorporate the elapsed time variable (see Hansen et al, 2006;Bin & Landry, 2013).…”

Section: (V) Temporal Variation Of Flood Riskmentioning

confidence: 99%

Flood Risk Information, Actual Floods and Property Values: A Quasi‐Experimental Analysis

et al. 2016

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Hedonic property price analysis tells us that property prices can be affected by natural hazards such as floods. This paper examines the impact of flood‐related variables (among other factors) on property values, and examines the effect of the release of flood risk map information on property values by comparing the impact with the effect of an actual flood incidence. An examination of the temporal variation of flood impacts on property values is also made. The study is the first of its kind where the impact of the release of flood risk map information to the public is compared with an actual flood incident. In this study, we adopt a spatial quasi‐experimental analysis using the release of flood risk maps by Brisbane City Council in Queensland, Australia, in 2009 and the actual floods of 2011. The results suggest that property buyers are more responsive to the actual incidence of floods than to the disclosure of information to the public on the risk of floods.

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Section: (V) Temporal Variation Of Flood Riskmentioning

confidence: 99%

Flood Risk Information, Actual Floods and Property Values: A Quasi‐Experimental Analysis

et al. 2016

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“…A handful of papers examine the effect on housing prices of other adverse environmental events, such as a pipeline explosion (Hansen, Benson, and Hagen 2006), the Three Mile Island nuclear accident (Nelson 1981), the explosion of a chemical plant (Carroll et al 1996), and the Loma Prieta earthquake (Beron et al 1997). These studies, along with cross-sectional analyses of the impact of environmental (dis)amenities on property prices, show that, first, homeowners perceive many environmental risks and adjust their risk assessments following disasters, and.…”

Section: Homeowners and Risk: Previous Researchmentioning

confidence: 99%

“…Individuals often neglect low-probability events (Kahneman and Tversky 1979;Kunreuther et al 2002), but a major disaster can have an at ten tion-focusing effect, increasing perceived risk (Hansen, Benson, and Hagen 2006). This can be explained by the availability heuristic, through which individuals assess the probability of an event's occurrence by how easily examples of such events come to mind (Tversky and Kahneman 1973).…”

Section: Homeowners and Risk: Previous Researchmentioning

confidence: 99%

Learning from Extreme Events: Risk Perceptions after the Flood

Kousky¹

2010

Land Economics

202

136

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“…These types of models have been applied to “insurable” risks including flood risk (Bin and Polasky, ; Hallstrom and Smith, ; Bin and Kruse, ; Bin, Kruse, and Landry, ; Carbone, Hallstrom, and Smith, ), earthquake risk (Naoi, Seko, and Sumita, ), manmade risks (Gayer, Hamilton, and Viscusi, , ; McCluskey and Rausser, ; Hansen, Benson, and Hagen, ), and mitigation efforts (Simmons, Kruse, and Smith, ).…”

mentioning

confidence: 99%

The Capitalization of Insurance Premiums in House Prices

Nyce¹,

Dumm²,

Sirmans³

et al. 2014

J of Risk & Insurance

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This study uses Miami-Dade County, Florida home sales, and Citizens Property Insurance Corporation data for the period 2004 through 2009 to measure the capitalization effect of increases in premiums on house prices. Using hedonic pricing models, spatial autocorrelation models, and difference-in-differences models, we find that new information was conveyed to homeowners in the higher risk areas by the 2004/2005 storms and that consumers appear to use the insurance premium as a "risk signal." We also find some support for the hypothesis that the risk of potential hurricane losses is communicated to potential homebuyers through windzone maps.

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Environmental Hazards and Residential Property Values: Evidence from a Major Pipeline Event

Cited by 58 publications

References 12 publications

Flood Risk Information, Actual Floods and Property Values: A Quasi‐Experimental Analysis

Flood Risk Information, Actual Floods and Property Values: A Quasi‐Experimental Analysis

Learning from Extreme Events: Risk Perceptions after the Flood

The Capitalization of Insurance Premiums in House Prices

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