2006 Fiscal Year Final Research Report Summary
Risk Averse Behavior toward Natural Disaster and Real Estate Pricing : Evidence from Earthquakes and Floods
| Project/Area Number |
17530140
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic theory
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| Research Institution | Hitotsubashi University |
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Principal Investigator |
SAITO Makoto Hitotsubashi University, Graduate School of Economics, Professor, 大学院経済学研究科, 教授 (10273426)
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| Co-Investigator(Kenkyū-buntansha) |
NAKAGAWA Masayuki Nihon University, Faculty of Economics, Professor, 経済学部, 教授 (70324853)
YAMADA Hisaki Tsukuba University, Graduate School of Social Engineering, 大学院システム情報工学研究科, 講師 (50334032)
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| Project Period (FY) |
2005 – 2006
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| Keywords | natural disaster risk / land pricing / risk averse hebavior / disaster prevention policy / hedonic pricing approach / flood risk / earthquake risk |
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| Research Abstract |
This project has yielded the following three outcomes in regard to the relationship between natural disaster risks and real estate pricing.
Firstly, we have successfully published in important English refereed journals, our continuing research on the relationship between earthquake risks and real estate pricing based on Tokyo metropolitan data. Nakagawa, Saito, and Yamaga (2007, forthcoming in Japanese Economic Review) present evidence for negative impacts of earthquake risks on land pricing, and demonstrate that the estimated impact is consistent with predictions from standard expected utility theory. Nakagawa et al. (2007, Regional Science and Urban Economics), on the other hand, show that earthquake-risk mitigation investment is beneficial for owners who operate apartment buildings in less robust areas based on the empirical study concerning the relationship between earthquake risks and apartment rents
Secondly, we have built a geographic infromation database to empirically explore the relationship between flood risks and land pricing. More concretely, we translate both the flood hazard map compiled by Aichi Prefecture and the official land prices into GIS-based data. Using this database, we will investigate how land prices responded to Tokai Floods that occurred in 2000, and how land prices have been influenced by several flood prevention measures which were implemented by local governments (mainly by Nagoya city).
Thirdly, based on the above empirical investigation, Makoto Saito, head investigator, contributed several articles on natural disaster prevention policies to newspapers and magazines
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