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Flooding risks and housing markets: a spatial hedonic analysis for La Plata City

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  • Rabassa, Mariano Javier
  • Zoloa, Juan Ignacio

Abstract

On 2 April 2013 a major flood struck the City of La Plata, Argentina, killing 89 people and displacing thousands of others. That event, the worst flood the city has suffered in the past 100 years, prompted plans for a new hydraulic infrastructure. Although such an investment is necessary, little is known about its benefits. This paper intends to shed some light on this issue by estimating the willingness to pay to avoid the risk of experiencing a flooding event. For this purpose, we have taken thousands of real estate prices in the La Plata Metropolitan Area and combined them with a high-resolution flood risks map to estimate spatial hedonic price models. The results show significant price discounting for properties in flood-prone areas.

Suggested Citation

  • Rabassa, Mariano Javier & Zoloa, Juan Ignacio, 2016. "Flooding risks and housing markets: a spatial hedonic analysis for La Plata City," Environment and Development Economics, Cambridge University Press, vol. 21(4), pages 464-489, August.
  • Handle: RePEc:cup:endeec:v:21:y:2016:i:04:p:464-489_00
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    Cited by:

    1. José Armando Cobián Álvarez & Budy P. Resosudarmo, 2019. "The cost of floods in developing countries’ megacities: a hedonic price analysis of the Jakarta housing market, Indonesia," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(4), pages 555-577, October.
    2. Erman,Alvina Elisabeth & Dallmann,Ingrid, 2022. "Putting a Price on Safety — A Hedonic Price Approach to Flood Risk in African Cities," Policy Research Working Paper Series 10127, The World Bank.
    3. Nepal, Mani & Rai, Rajesh K. & Khadayat, Madan S. & Somanathan, E., 2020. "Value of cleaner neighborhoods: Application of hedonic price model in low income context," World Development, Elsevier, vol. 131(C).
    4. Małgorzata Dudzińska & Barbara Prus & Radosław Cellmer & Stanisław Bacior & Katarzyna Kocur-Bera & Anna Klimach & Agnieszka Trystuła, 2020. "The Impact of Flood Risk on the Activity of the Residential Land Market in a Polish Cultural Heritage Town," Sustainability, MDPI, vol. 12(23), pages 1-18, December.
    5. Pei-Ing Wu & Yi Chen & Je-Liang Liou, 2021. "Housing property along riverbanks in Taipei, Taiwan: a spatial quantile modelling of landscape benefits and flooding losses," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 2404-2438, February.

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