AN ANALYSIS OF THE HOUSING-MARKET BEFORE AND AFTER THE 1989 LOMA-PRIETA EARTHQUAKE

Residential housing sales data from the San Francisco Bay area are mer ged with earthquake hazard measures, geologic measures, neighborhood q uality measures, and community characteristics in order to estimate th e hedonic price of earthquake risk before and after the October 17, 19 89, Loma Prieta earthquake. The estimates suggest that the hedonic pri ce fell after the earthquake, indicating that consumers had initially overestimated the earthquake hazard. This suggests that information ab out earthquake risks is imperfect and that some efficiency may be real ized by devoting more resources to earthquake risk communication.