River flooding and housing values - an economic assessment of environmental risk
AbstractThe purpose of this article is to explore the determinants of the implicit price of the risk of flooding. We carry out a meta-analysis on estimates resulting from the application of hedonic price models. The variable under scrutiny is the relative change in the price of a house located in a floodplain when compared to a house located outside a floodplain, per level of risk (the reference level being the 100-year floodplain). It appears that the choice of specification of hedonic price models affects the variability between estimates. Factors related to the exploitation of spatial characteristics of the data do also play a role. Besides, a higher level of income goes together with a lower implicit price of risk, as it can be a proxy for a lower vulnerability to material loss. Finally it appears that specific attention has to be paid to the perceived level of risk; elements affecting the perception of individuals on the effective risk of flooding and allowing them to update their perception of the level of risk explain variability between estimates. In areas where a flood recently took place, the relative change in the price of a house due to flood risk is larger than in areas not affected.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p447.
Date of creation: Aug 2005
Date of revision:
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.ersa.org
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-05 (All new papers)
- NEP-ENV-2006-02-05 (Environmental Economics)
- NEP-URE-2006-02-05 (Urban & Real Estate Economics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.