Assessing the price effects of flood hazard disclosure under the California natural hazard disclosure law (AB 1195)
This study uses hedonic analysis to estimate the effects of flood hazard disclosure under the 1998 California Natural Hazard Disclosure Law (AB 1195) on property values throughout California. It finds that the average floodplain home sold for 4.2% less than a comparable non-floodplain home following AB 1195 while before that law there was no significant price differential. The introduction of interaction terms indicates that the magnitude of the price reduction due to AB 1195 varies positively with Hispanic population share. An average floodplain home in a half-Hispanic neighbourhood saw a $12 324 negative capitalization due to AB 1195, while that amount was only $2191 for a neighbourhood with 10% Hispanic residents. Results suggest that, in particular, homebuyers in Hispanic communities are better disclosed to under AB 1195 than they were under the National Flood Insurance Program (NFIP), which was the primary policy regulating flood disclosure in California prior to passage of AB 1195.
Volume (Year): 47 (2004)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CJEP20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CJEP20|
When requesting a correction, please mention this item's handle: RePEc:taf:jenpmg:v:47:y:2004:i:1:p:137-162. See general 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.