Estimating Consumer Valuation of Earthquake Risk: Evidence from Japanese Housing Markets

Michio Naoi, Kazuto Sumita, Miki Seko

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)117-133
Number of pages17
JournalInternational Real Estate Review
Issue number2
Publication statusPublished - 2010 Dec 1


  • Earthquake
  • Hedonic price model
  • Risk premium

ASJC Scopus subject areas

  • Demography
  • Geography, Planning and Development
  • Accounting
  • Finance
  • Urban Studies
  • Economics and Econometrics


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