Salience of Hazard Disclosure and House Prices: Evidence from Christchurch, New Zealand (Job Market Paper) [Draft]
In 2010 and 2011, Christchurch, the second-largest city in New Zealand, was struck by a sequence of destructive earthquakes that caused massive liquefaction and widespread damage to the city’s infrastructure and residential dwellings. To facilitate the recovery and rebuild of the city, residential land was divided into three Technical Categories (TCs) based on the expected liquefaction performance in future significant earthquakes. I estimate the impacts of the earthquake sequence and the TC zoning on property values. Using monthly transaction data from 2000 to 2018 in the City of Christchurch, I find that the inherent liquefaction hazard was not capitalized before the 2010-2011 earthquake sequence. The earthquake sequence prepared the market for a price change to liquefaction hazard. The area-wide TC zoning clarified the relative liquefaction hazard and reinforced the price change; in the long-run average property values declined significantly by 20 percent in TC3, the area most liquefaction hazard-prone, while property values declined by 7 percent in TC2, the area second most liquefaction hazard-prone. In 2018, seven years after zoning, the price difference between TC3 and TC2 is still as significant as 10 percent. Moreover, I find that property values increased with distance to the residential red zone (the area where liquefaction damage was beyond economical repair and was cleared off) the most in TC3 after the earthquake sequence.
House Price and House Price Index Decomposition: Does Land (Terrain) Slope Matter? (Draft coming soon!)
Sloping land adds complexity to construction, hence increases the construction cost of a house. Moreover, the degree of the slope may limit the use and development of a piece of land, hence decrease its value. Therefore, to form reliable constant quality land price indices require controlling physical attributes of land that intrinsically confine the use of land. The paper extends the builder’s model developed in Eurostat (2013) and examines the role of terrain slope in constructing constant quality land, structure and aggregate property price indices in selected neighborhoods in Auckland, New Zealand, where sloped terrain is common. Using a dataset from three neighboring school enrolment zones in Auckland, New Zealand, I find that land prices decrease with land slopes. Ceteris paribus, a square meter of flat or gently sloped land costs about 131 New Zealand dollars more than a square meter land with a slope of 8 - 15◦ (14.05 - 26.79%). Adding land slopes as the land-specific topographical attributes as additional land characteristics to land size and the school zone that represents the location and public service associated with a site, the estimated constant quality land price index decreases slightly by 4.57 percentage point (a decrease of 1.6%) at the end of the estimation period than without it.
Does Proximity to School Still Matter Once Access to Your Preferred School Zone Has Already Been Secured? With Sandy Dall'erba (Under review )
This paper examines the relationship between proximity to secondary schools and property values within four school enrollment zones in Auckland, New Zealand. Results indicate that, in the most desired school zones, house prices increase with proximity to school but decrease above 4 km. Moreover, we find that the nonlinear effects are most prominent at the lower quantile of the sales price distribution. In the other two school zones, proximity to school reduces house prices. These results demonstrate that distance to school still matters within each school enrollment zone.
WORK IN PROGRESS
Locally Weighted Quantile Price Indices: Evidence form New Zealand
Impact of Unexpected Natural Disaster on Retirement
Spatial Dependency and Spatial Spillover of Hazard Zoning