@article{Nguyen:343021, recid = {343021}, author = {Nguyen, Quyen and Thorsnes, Paul and Diaz-Rainey , Ivan and Moore, Antoni and Cox, Simon and Stirk-Wang, Leon }, title = {Price recovery after the flood: risk to residential property values from climate change-related flooding}, journal = {Australian Journal of Agricultural and Resource Economics}, address = {2022-01-01}, number = {428-2024-2825}, month = {Jan}, year = {2022}, abstract = {We take advantage of a combination of a severe weather event from 3 to 4 June 2015 and a local policy, to investigate the housing market response to climate changerelated flooding hazard. The study focuses on a residential area in a low-lying coastal suburb of Dunedin, New Zealand, where the groundwater level is shallow and close to sea level. An unusually heavy rain event in June 2015 resulted in flooding of a significant portion of land in especially low-lying areas. The city council responded by reviewing processes for storm-water management and by imposing minimum-floorlevel [MFL] requirements on new construction in the low-lying areas previously identified as at risk of flooding. Applying a ‘diff-in-diff-in-diff’ strategy in hedonic regression analyses, we find that houses in the MFL zone sell for a discount of about 5 per cent prior to the flood. This discount briefly tripled in the area that flooded, but disappeared within 15 months, indicating either very short memory among homebuyers or no long-run change in perception of hazard.}, url = {http://ageconsearch.umn.edu/record/343021}, doi = {https://doi.org/10.22004/ag.econ.343021}, }