The impact of flooding on real estate transactions in densely populated areas: Evidence from the 2019 Typhoon Hagibis in Japan

IF 2.6 3区经济学 Q1 ECONOMICS

Journal of the Japanese and International Economies Pub Date : 2025-03-25 DOI:10.1016/j.jjie.2025.101363

Ikuto Aiba , Daisuke Hasegawa

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Abstract

This study examines the impact of flooding on real estate transactions in an urban area using the flooding caused by Typhoon Hagibis, which hit Japan in October 2019, as a natural experiment. Applying the difference-in-differences method, we find that the contract and offer prices of properties in flooded areas declined by about 6.0% and 5.5% on average, respectively. These price drops indicate an approximately 0.5 percentage point rise in the discount rate, which is defined as the percentage change from the offer to contract prices. Regarding apartment transactions, we show that the negative effects are significant for higher floors but insignificant for lower floors. This suggests the possibility that buyers have become more aware that higher floors are also vulnerable to flooding, given the flood-associated risks of power and water outages. The findings also reveal that the negative effects of flooding on detached houses are more serious and emerge more slowly than those on apartments.

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洪水对人口稠密地区房地产交易的影响：来自 2019 年日本台风 "哈吉比斯 "的证据

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来源期刊

Journal of the Japanese and International Economies Multiple-

CiteScore

5.10

自引率

6.90%

发文量

期刊介绍： The Journal of the Japanese and International Economies publishes original reports of research devoted to academic analyses of the Japanese economy and its interdependence on other national economies. The Journal also features articles that present related theoretical, empirical, and comparative analyses with their policy implications. Book reviews are also published.