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Flood prone risk and amenity values: a spatial hedonic analysis

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  • Samarasinghe, Oshadhi
  • Sharp, Basil

Abstract

This study examines the impact of flood-hazard zone location on residential property prices. The study utilises data from over 2000 private residential property sales occurred during 2006 in North Shore City, New Zealand. A spatial autoregressive hedonic model is developed to provide efficient estimates of the marginal effect of flood prone risks on property prices. Results suggest that the sale price of a residential property within a flood prone area is lower than an equivalent property outside the flood prone area. The flood plain location discount is reduced by the release of public information regarding flood risk.

Suggested Citation

  • Samarasinghe, Oshadhi & Sharp, Basil, 2010. "Flood prone risk and amenity values: a spatial hedonic analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), December.
  • Handle: RePEc:ags:aareaj:162020
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    File URL: http://purl.umn.edu/162020
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    References listed on IDEAS

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    1. Arthur Grimes & Yun Liang, 2007. "Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect?," Working Papers 07_09, Motu Economic and Public Policy Research.
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    5. Won Kim, Chong & Phipps, Tim T. & Anselin, Luc, 2003. "Measuring the benefits of air quality improvement: a spatial hedonic approach," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 24-39, January.
    6. Randall S. Guttery & Stephen L. Poe & C. F. Sirmans, 2004. "An Empirical Investigation of Federal Wetlands Regulation and Flood Delineation: Implications for Residential Property Owners," Journal of Real Estate Research, American Real Estate Society, vol. 26(3), pages 229-316.
    7. Basu, Sabyasachi & Thibodeau, Thomas G, 1998. "Analysis of Spatial Autocorrelation in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 61-85, July.
    8. Linneman, Peter, 1980. "Some empirical results on the nature of the hedonic price function for the urban housing market," Journal of Urban Economics, Elsevier, vol. 8(1), pages 47-68, July.
    9. Kurt J. Beron & James C. Murdoch & Mark A. Thayer & Wim P. M. Vijverberg, 1997. "An Analysis of the Housing Market before and after the 1989 Loma Prieta Earthquake," Land Economics, University of Wisconsin Press, vol. 73(1), pages 101-113.
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    Citations

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    Cited by:

    1. Mahmoudi, Parvin & MacDonald, Darla Hatton & Crossman, Neville D. & Summers, David M. & van der Hoek, John, 2013. "Space matters: the importance of amenity in planning metropolitan growth," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), March.
    2. Levente Timar & Arthur Grimes & Richard Fabling, 2014. "That Sinking Feeling: The Changing Price of Disaster Risk Following an Earthquake," Working Papers 14_13, Motu Economic and Public Policy Research.
    3. Prasad Neelawala & Clevo Wilson & Wasantha Athukorala, 2013. "The impact of mining and smelting activities on property values: a study of Mount Isa city, Queensland, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 60-78, January.
    4. Balbi Stefano & Giupponi Carlo & Mojtahed Vahid & Olschewski Roland, 2015. "The Total Cost of Water-Related Disasters," Review of Economics, De Gruyter, vol. 66(2), pages 225-252, August.
    5. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    6. James R. Meldrum, 2016. "Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 725-750, August.
    7. Levente Timar & Arthur Grimes & Richard Fabling, 2015. "Before a Fall: Impacts of Earthquake Regulation and Building Codes on the Commercial Building Market," Working Papers 15_19, Motu Economic and Public Policy Research.
    8. Stefano Balbi & Carlo Giupponi & Roland Olschewski & Vahid Mojtahed, 2013. "The economics of hydro-meteorological disasters: approaching the estimation of the total costs," Working Papers 2013-12, BC3.
    9. Parvin Mahmoudi & Darla Hatton MacDonald & Neville D. Crossman & David M. Summers & John van der Hoek, 2013. "Space matters: the importance of amenity in planning metropolitan growth," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 38-59, January.

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