Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190444 
Year of Publication: 
2016
Series/Report no.: 
IEHAS Discussion Papers No. MT-DP - 2016/20
Publisher: 
Hungarian Academy of Sciences, Institute of Economics, Budapest
Abstract: 
This study employs the hedonic property price method to analyze the flood risk effect on a rich set of data. The analysis is carried out on Hungary, but as the control variables are extremely elaborated, our results have general importance. The paper finds a significant reduction in housing prices accounted to ZIP code level flood risk even after controlling for a wide range of geographical and socio-economic features. This paper finds that flood risk reduces housing prices substantially. It turns out that the average elasticity is driven by being in close proximity of major rivers. While riverside areas have an overall price premium in Hungary, risky areas loose this advantage to flood risk. In ZIP code areas where the inundation depths are 10% higher, housing prices tend to be 1% lower on average plus another 1% lower along the major rivers.
Subjects: 
housing
hedonic pricing
flood risk
geography
JEL: 
Q51
Q54
R30
R31
ISBN: 
978-615-5594-56-4
Document Type: 
Working Paper

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