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Flood hazards impact on neighborhood house prices: A spatial quantile regression analysis

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  • Zhang, Lei

Abstract

This study examines whether being located within a 100-year floodplain has an impact on the price of residential single-family house sales using house sales data in the Fargo-Moorhead Metropolitan Statistical Area between 2000 and 2013. A spatial quantile regression is applied to investigate the flood hazards impact on conditional higher- vs lower- priced homes, while accounting for spatial autocorrelation. The findings show that the location within a floodplain reduces property value. Furthermore, the negative impact of flood hazards on property values are stronger among lower-priced homes, and weaker among higher-priced homes. In addition, the study examines if a major flood in 2009 had an impact on the home buyers' perception about flood risk. The results show that about a year after the major flood, home buyers responded the most, however, the effect quickly diminished after 2010. Across quantiles, the 2009 flood had more effect on lower-priced than higher-priced homes.

Suggested Citation

  • Zhang, Lei, 2016. "Flood hazards impact on neighborhood house prices: A spatial quantile regression analysis," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 12-19.
    • Handle: RePEc:eee:regeco:v:60:y:2016:i:c:p:12-19
    DOI: 10.1016/j.regsciurbeco.2016.06.005
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    More about this item

    Keywords

    Hedonic model; Flood hazards; Spatial quantile regression;
    All these keywords.

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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