Assessing Negative Externalities of Rural Abandoned Houses in South Korea: Insights from Discrete Choice Experiments

The proliferation of abandoned houses in rural South Korea poses significant challenges to sustainable rural development, driven by declining birth rates, aging populations, and urban migration. However, effective policy implementation is hindered by the lack of understanding of the negative externalities caused by abandoned houses. This study fills this gap by estimating the negative externalities associated with abandoned rural houses using discrete choice experiments. Surveys targeting individuals planning rural relocations and potential tourists considering rural stays were conducted to quantify the external costs. Our findings reveal that the marginal willingness to pay associated with abandoned houses is negative and decreases with an increasing number of abandoned houses nearby, both in the context of house purchases and rural stays. Extrapolating these results to the national level, we estimate the aggregate negative externalities value to be approximately 4.2 trillion KRW per year, highlighting significant negative externalities in rural areas nationwide. The implications of our analysis underscore the severity of negative externalities from abandoned houses, which may surpass the value of housing services, discourage migration, and prompt residents to leave rural communities, thus exacerbating the issue. Our study emphasizes the necessity for further research and policy interventions to address the negative externalities associated with abandoned rural houses, offering insights into the potential use of discrete choice experiments in similar contexts.