@article{0db82e43a22e4e358a5af909fdd3ad04,
title = "Estimating Consumer Valuation of Earthquake Risk: Evidence from Japanese Housing Markets",
abstract = "The relationships between seismic risk and rental and owner-occupied housing prices in the whole of Japan are examined. The empirical results from hedonic regressions with earthquake risk indices suggest that: (1) earthquake occurrence probability has a significantly negative effect on monthly housing rent, (2) the effect of earthquake probability seems to depend on the characteristics of the individual housing unit (e.g. age of dwelling) for owner-occupied housing, (3) the estimated risk premium is much larger for older buildings, and (4) the share of quake-resistant dwellings in the neighborhood area is significantly and positively related to the housing price of the individual unit. These results suggest that anti-seismic policies that target specific groups of dwellings, such as rental houses and older buildings, help to mitigate welfare loss due to earthquakes.",
keywords = "Earthquake, Hedonic price model, Risk premium",
author = "Michio Naoi and Kazuto Sumita and Miki Seko",
note = "Funding Information: The Keio Household Panel Survey (KHPS), sponsored by the Ministry of Education, Culture, Sports, Science and Technology, is the first comprehensive panel survey of households in Japan, conducted annually by Keio University since 2004. In wave 1, self-administered questionnaires were given to 4,005 male and female respondents, aged 20-69 years. These respondents were selected by stratified two-stage random sampling. If the primary respondent was married at the time of the survey, the same questionnaire was given to his/her spouse. The standard procedure for the KHPS was to send a pre-survey letter to the respondent and then provide a post-interview payment of 3,000 yen (approximately $30) per household. Funding Information: We are grateful to the National Research Institute for Earth Science and Disaster Prevention (NIED) for generously providing us with the data on earthquake occurrence probability. We also thank Jay Weiser and participants at the 12th AsRES International Conference for their helpful comments. Financial support from the Japan Economic Research Foundation is gratefully acknowledged. Also, the first author (Michio Naoi) acknowledges a Grant-in-Aid (#19730183) for Young Scientists from the Ministry of Education, Culture, Sports, Science and Technology. The second and third authors (Kazuto Sumita and Miki Seko) acknowledge a Grant-in-Aid (#19530157) for Scientific Research (C) from the Ministry of Education Culture, Sports, Science and Technology. Publisher Copyright: {\textcopyright} 2010, Global Social Science Institute. All rights reserved.",
year = "2010",
month = dec,
day = "1",
doi = "10.53383/100122",
language = "English",
volume = "13",
pages = "117--133",
journal = "International Real Estate Review",
issn = "2154-8919",
publisher = "Global Social Science Institute",
number = "2",
}