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Public Perceptions of Earthquake Risk and the Impact on Land Pricing: The Case of the Uemachi Fault Line in Japan

Author

Listed:
  • Tao Gu
  • Masayuki Nakagawa
  • Makoto Saito
  • Hisaki Yamaga

Abstract

In this paper, we explore how land pricing reflects public perceptions of earthquake risk using officially appraised prices of land situated along the Uemachi fault, which lies on a north–south axis in the east of Japan's Osaka Prefecture. We reveal that land pricing along this fault has only incorporated fault‐driven earthquake risk since residents and policy‐makers first realized its potential following damage to the southern part of Hyogo Prefecture in a January 1995 earthquake along the Rokko–Awaji fault (an event now known as the Hanshin–Awaji earthquake). We find evidence of a discount of 20% in nonresidential land prices for every kilometre closer to the Uemachi fault line since the Hanshin–Awaji earthquake.

Suggested Citation

  • Tao Gu & Masayuki Nakagawa & Makoto Saito & Hisaki Yamaga, 2018. "Public Perceptions of Earthquake Risk and the Impact on Land Pricing: The Case of the Uemachi Fault Line in Japan," The Japanese Economic Review, Japanese Economic Association, vol. 69(4), pages 374-393, December.
    • Handle: RePEc:bla:jecrev:v:69:y:2018:i:4:p:374-393
    DOI: 10.1111/jere.12173
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    Cited by:

    1. Aiba, Ikuto & Hasegawa, Daisuke, 2025. "The impact of flooding on real estate transactions in densely populated areas: Evidence from the 2019 Typhoon Hagibis in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 76(C).
    2. Gu, Tao & Nakagawa, Masayuki & Saito, Makoto & Yamaga, Hisaki, 2021. "Estimation of nonlinear functions using coarsely discrete measures in panel data: The relationship between land prices and earthquake risk in the Tokyo Metropolitan District," Discussion Paper Series 729, Institute of Economic Research, Hitotsubashi University.
    3. Chien-Yuan Sher & Nai-Wei Chen & Yu-Hsi Liu & Ryan H. Murphy, 2021. "The impact of soil-liquefaction information disclosures on housing prices: evidence from Kaohsiung, Taiwan," The Japanese Economic Review, Springer, vol. 72(2), pages 217-241, April.
    4. Marco Modica & Roberto Zoboli & Fabrizio Meroni & Vera Pessina & Thea Squarcina & Mario Locati, 2021. "‘Near miss’ housing market response to the 2012 northern Italy earthquake: The role of housing quality and risk perception," Urban Studies, Urban Studies Journal Limited, vol. 58(11), pages 2293-2309, August.
    5. Mizuki Kawabata & Michio Naoi & Shohei Yasuda, 2022. "Earthquake risk reduction and residential land prices in Tokyo," Journal of Spatial Econometrics, Springer, vol. 3(1), pages 1-21, December.
    6. Yoshiaki OGURA & Duc Giang NGUYEN & Thu Ha NGUYEN, 2022. "Floods and Loan Reallocation: New evidence," Discussion papers 22088, Research Institute of Economy, Trade and Industry (RIETI).
    7. Kawabata, Mizuki & Naoi, Michio & Yasuda, Shohei, 2025. "The impact of urban redevelopment for mitigating earthquake damage risk on land values," Regional Science and Urban Economics, Elsevier, vol. 115(C).

    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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