Abstract
The relationships between seismic risk and rental and owner-occupied housing prices in all Japan are examined. Empirical results from hedonic regressions with earthquake risk indices suggest that (1) the earthquake occurrence probability has significantly negative effect on the monthly housing rent, (2) the effect of earthquake probability in the owner-occupied housing market is not so clear as in the rental market, (3) the estimated risk premium is larger for steel-framed concrete apartments, and (4) the share of quake-resistant dwellings in the neighborhood area is significantly and positively related to the housing price of the individual unit. These results suggest that anti-seismic policies targeting specific groups of dwellings—such as rental houses—help to mitigate the welfare loss due to the earthquake loss.
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