An Empirical Analysis on the Effect of the Abandoned Building Maintenance Project on the Price of Neighboring Apartments

Abstract

This paper empirically analyzes the changes in the price of apartments which are adjacent to an abandoned building before and after the selection of the building as a target of a maintenance project by the Ministry of Land, Infrastructure and Transport in Korea. The analytic model to capture a public value from the project is a difference-in-differences framework, and the data used for the analysis correspond to the actual transaction prices. According to the empirical results, after the selection of the abandoned building by the maintenance project, the prices of the neighboring apartments increased by approximately 82.6 dollars per one square meter of the apartments compared to those of apartments which are across a river. The existence of such positive external effects would support the public intervention in managing the abandoned buildings.