Perceived earthquake risk in housing purchases

Shi, S; Naylor, M; Xiao, J

Perceived earthquake risk in housing purchases

Shi, S

Naylor, M Xiao, J

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Publication Type:: Working Paper
Citation:: 2021
Issue Date:: 2021

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Field	Value	Language
dc.contributor.author	Shi, S https://orcid.org/0000-0003-4188-5151
dc.contributor.author	Naylor, M
dc.contributor.author	Xiao, J
dc.date.accessioned	2023-06-15T00:01:43Z
dc.date.available	2023-06-15T00:01:43Z
dc.date.issued	2021
dc.identifier.citation	2021
dc.identifier.uri	http://hdl.handle.net/10453/170763
dc.description.abstract	This paper investigates the impact of an earthquake on households' perception of the seismic risks associated with residential locations—and, consequently, the impact of this change in perceptions on real estate prices—by performing revealed preference analysis on a unique data set of house prices and damage claims after the 2010/2011 Canterbury earthquake in New Zealand. We show that both informational and heuristic obstacles could have caused households to underestimate location earthquake risk before the quake and overreact to it after the quake. Our findings highlight the importance of quake-related information for seismic risk management and are robust to households’ risk preferences in neighborhood propensity score matching.
dc.language	en
dc.rights	info:eu-repo/semantics/embargoedAccess
dc.subject	1205 Urban and Regional Planning
dc.subject.classification	Urban & Regional Planning
dc.title	Perceived earthquake risk in housing purchases
dc.type	Working Paper
utslib.for	1205 Urban and Regional Planning
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
utslib.copyright.status	open_access	*
utslib.copyright.embargo	2024-02-18T00:00:00+1000Z
dc.date.updated	2023-06-15T00:01:29Z

Abstract:

This paper investigates the impact of an earthquake on households' perception of the seismic risks associated with residential locations—and, consequently, the impact of this change in perceptions on real estate prices—by performing revealed preference analysis on a unique data set of house prices and damage claims after the 2010/2011 Canterbury earthquake in New Zealand. We show that both informational and heuristic obstacles could have caused households to underestimate location earthquake risk before the quake and overreact to it after the quake. Our findings highlight the importance of quake-related information for seismic risk management and are robust to households’ risk preferences in neighborhood propensity score matching.

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http://hdl.handle.net/10453/170763