THE IMPACT OF NATURAL HAZARDS ON HOUSING VALUES - THE LOMA-PRIETA EARTHQUAKE

A large, detailed data set is used to examine the effect of the Loma P rieta (World Series) earthquake on housing prices in the San Francisco Bay area. This relationship is examined while controlling for potenti al confounding variables, such as location-specific risk and the timin g of the earthquake. The results indicate that the Loma Prieta earthqu ake caused an area wide reduction in property values. In addition, it seems that individuals considered other measures of earthquake risk in their housing purchases, yielding a measurable price gradient. These results are relatively robust, remaining stable across estimated-funct ional forms and independent variable sets.