IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES

A before and after ANALYSIS

Wasantha Athukorala, Wade E. Martin, Prasad Neelawala, Darshana Dewage Peiris Rajapaksa Rajapaksa, Clevo Wilson

Research output: Contribution to journalReview article

5 Citations (Scopus)

Abstract

One of the most evident casualties of a natural disaster is the property market. The private and social costs from such events run into millions of dollars. In this paper, we use a unique dataset to examine the impact on residential house prices affected by natural disasters using a hedonic property (HP) values approach. For this purpose, we use data before and after a wildfire and floods from Rockhampton in central Queensland, Australia. The data is unique because one suburb was affected by wildfires and another was affected by floods. For the analysis, three suburbs namely Frenchville, Park Avenue and Norman Gardens are used. Frenchville was significantly affected by wildfires in the latter part of 2009 and to a lesser extent in 2012, while Park Avenue was affected by floods at the end of 2010, January 2011-2013. Norman Gardens, which was relatively unaffected, is used as a control site. This enables us to examine the before and after effects on property values in the three suburbs. The results confirm that soon after a natural disaster property prices in affected areas decrease even though the large majority of individual houses remain unaffected. Furthermore, the results indicate that the largely unaffected suburb may gain immediately after a natural disaster but this gain may disappear if natural disasters continue to occur in the area/region due to the stigma created. The results have several important policy decision and welfare implications which are briefly discussed in the paper.

Original languageEnglish
Article number1640002
JournalSingapore Economic Review
Volume61
Issue number1
DOIs
Publication statusPublished - Mar 1 2016

Fingerprint

Natural disasters
Suburbs
Wildfire
Property values
Welfare implications
Queensland
House prices
Social costs
Stigma
Property market
Property prices
Casualties

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Athukorala, W., Martin, W. E., Neelawala, P., Rajapaksa, D. D. P. R., & Wilson, C. (2016). IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES: A before and after ANALYSIS. Singapore Economic Review, 61(1), [1640002]. https://doi.org/10.1142/S0217590816400026

IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES : A before and after ANALYSIS. / Athukorala, Wasantha; Martin, Wade E.; Neelawala, Prasad; Rajapaksa, Darshana Dewage Peiris Rajapaksa; Wilson, Clevo.

In: Singapore Economic Review, Vol. 61, No. 1, 1640002, 01.03.2016.

Research output: Contribution to journalReview article

Athukorala, W, Martin, WE, Neelawala, P, Rajapaksa, DDPR & Wilson, C 2016, 'IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES: A before and after ANALYSIS', Singapore Economic Review, vol. 61, no. 1, 1640002. https://doi.org/10.1142/S0217590816400026
Athukorala, Wasantha ; Martin, Wade E. ; Neelawala, Prasad ; Rajapaksa, Darshana Dewage Peiris Rajapaksa ; Wilson, Clevo. / IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES : A before and after ANALYSIS. In: Singapore Economic Review. 2016 ; Vol. 61, No. 1.
@article{f58995e7b75f4bd2b9ca204607cbf352,
title = "IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES: A before and after ANALYSIS",
abstract = "One of the most evident casualties of a natural disaster is the property market. The private and social costs from such events run into millions of dollars. In this paper, we use a unique dataset to examine the impact on residential house prices affected by natural disasters using a hedonic property (HP) values approach. For this purpose, we use data before and after a wildfire and floods from Rockhampton in central Queensland, Australia. The data is unique because one suburb was affected by wildfires and another was affected by floods. For the analysis, three suburbs namely Frenchville, Park Avenue and Norman Gardens are used. Frenchville was significantly affected by wildfires in the latter part of 2009 and to a lesser extent in 2012, while Park Avenue was affected by floods at the end of 2010, January 2011-2013. Norman Gardens, which was relatively unaffected, is used as a control site. This enables us to examine the before and after effects on property values in the three suburbs. The results confirm that soon after a natural disaster property prices in affected areas decrease even though the large majority of individual houses remain unaffected. Furthermore, the results indicate that the largely unaffected suburb may gain immediately after a natural disaster but this gain may disappear if natural disasters continue to occur in the area/region due to the stigma created. The results have several important policy decision and welfare implications which are briefly discussed in the paper.",
author = "Wasantha Athukorala and Martin, {Wade E.} and Prasad Neelawala and Rajapaksa, {Darshana Dewage Peiris Rajapaksa} and Clevo Wilson",
year = "2016",
month = "3",
day = "1",
doi = "10.1142/S0217590816400026",
language = "English",
volume = "61",
journal = "Singapore Economic Review",
issn = "0217-5908",
publisher = "World Scientific Publishing Co. Pte Ltd",
number = "1",

}

TY - JOUR

T1 - IMPACT of WILDFIRES and FLOODS on PROPERTY VALUES

T2 - A before and after ANALYSIS

AU - Athukorala, Wasantha

AU - Martin, Wade E.

AU - Neelawala, Prasad

AU - Rajapaksa, Darshana Dewage Peiris Rajapaksa

AU - Wilson, Clevo

PY - 2016/3/1

Y1 - 2016/3/1

N2 - One of the most evident casualties of a natural disaster is the property market. The private and social costs from such events run into millions of dollars. In this paper, we use a unique dataset to examine the impact on residential house prices affected by natural disasters using a hedonic property (HP) values approach. For this purpose, we use data before and after a wildfire and floods from Rockhampton in central Queensland, Australia. The data is unique because one suburb was affected by wildfires and another was affected by floods. For the analysis, three suburbs namely Frenchville, Park Avenue and Norman Gardens are used. Frenchville was significantly affected by wildfires in the latter part of 2009 and to a lesser extent in 2012, while Park Avenue was affected by floods at the end of 2010, January 2011-2013. Norman Gardens, which was relatively unaffected, is used as a control site. This enables us to examine the before and after effects on property values in the three suburbs. The results confirm that soon after a natural disaster property prices in affected areas decrease even though the large majority of individual houses remain unaffected. Furthermore, the results indicate that the largely unaffected suburb may gain immediately after a natural disaster but this gain may disappear if natural disasters continue to occur in the area/region due to the stigma created. The results have several important policy decision and welfare implications which are briefly discussed in the paper.

AB - One of the most evident casualties of a natural disaster is the property market. The private and social costs from such events run into millions of dollars. In this paper, we use a unique dataset to examine the impact on residential house prices affected by natural disasters using a hedonic property (HP) values approach. For this purpose, we use data before and after a wildfire and floods from Rockhampton in central Queensland, Australia. The data is unique because one suburb was affected by wildfires and another was affected by floods. For the analysis, three suburbs namely Frenchville, Park Avenue and Norman Gardens are used. Frenchville was significantly affected by wildfires in the latter part of 2009 and to a lesser extent in 2012, while Park Avenue was affected by floods at the end of 2010, January 2011-2013. Norman Gardens, which was relatively unaffected, is used as a control site. This enables us to examine the before and after effects on property values in the three suburbs. The results confirm that soon after a natural disaster property prices in affected areas decrease even though the large majority of individual houses remain unaffected. Furthermore, the results indicate that the largely unaffected suburb may gain immediately after a natural disaster but this gain may disappear if natural disasters continue to occur in the area/region due to the stigma created. The results have several important policy decision and welfare implications which are briefly discussed in the paper.

UR - http://www.scopus.com/inward/record.url?scp=84959350123&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84959350123&partnerID=8YFLogxK

U2 - 10.1142/S0217590816400026

DO - 10.1142/S0217590816400026

M3 - Review article

VL - 61

JO - Singapore Economic Review

JF - Singapore Economic Review

SN - 0217-5908

IS - 1

M1 - 1640002

ER -