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The Impact of Natural Hazards on Housing Values: The Loma Prieta Earthquake
Author(s) -
Murdoch James C.,
Singh Harinder,
Thayer Mark
Publication year - 1993
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00606
Subject(s) - seismology , natural (archaeology) , geography , property value , geology , economics , archaeology , real estate , finance
A large, detailed data set is used to examine the effect of the Loma Prieta (World Series) earthquake on housing prices in the San Francisco Bay area. This relationship is examined while controlling for potential confounding variables, such as location‐specific risk and the timing of the earthquake. The results indicate that the Loma Prieta earthquake caused an area wide reduction in property values. In addition, it seems that individuals considered other measures of earthquake risk in their housing purchases, yielding a measurable price gradient. These results are relatively robust, remaining stable across estimated functional forms and independent variable sets.