Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities
This paper uses a hedonic property price function to estimate the relationship between flood risk and rents in four Sub-Saharan Africa cities: Accra, Antananarivo, Dar es Salaam, and Addis Ababa. The analysis relies on household survey data collect...
Main Authors: | , |
---|---|
Format: | Working Paper |
Language: | English |
Published: |
World Bank, Washington, DC
2022
|
Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/099947307212239604/IDU0b6fb06980cadc0453908efb0daf3293b3149 http://hdl.handle.net/10986/37754 |
id |
okr-10986-37754 |
---|---|
recordtype |
oai_dc |
spelling |
okr-10986-377542022-08-19T13:56:02Z Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities Erman, Alvina Dallmann, Ingrid NATURAL DISASTERS DISASTER RISK MANAGEMENT HEDONIC REGRESSION POVERTY RESILIENCE URBAN HOUSING SUSTAINABLE CITIES URBANIZATION URBAN FLOODS ACCESS TO JOBS FLOOD RISK MANAGEMENT ACCRA ANTANANARIVO DAR ES SALAAM ADDIS ABABA HOUSING SECURITY RENT PRICES This paper uses a hedonic property price function to estimate the relationship between flood risk and rents in four Sub-Saharan Africa cities: Accra, Antananarivo, Dar es Salaam, and Addis Ababa. The analysis relies on household survey data collected after flood events in the cities. Flood risk is measured with self-reported data on past flood exposure and perception of future risk of flooding of households. The study finds that flood risk is associated with lower rents in Accra, Antananarivo, Dar es Salaam, and Addis Ababa, ranging from 14 to 56 percent lower. In contrast, risk is associated with higher rent in Dar es Salaam, which could be potentially attributed to a combination of lack of awareness of flood risk among renters, high transaction costs and omitted variable bias. For example, only 12 percent of households living in flood-prone areas were aware of the flood risk when they moved in. In Antananarivo, job density is associated with higher rents while in Accra and Addis Ababa, higher job density is associated with lower rents. Results are negative but not significant in Dar es Salaam. When interacting job density with flood risk for each city, the negative effect of job density on rents is higher (in absolute value) when flood risk is high in Accra and Addis Ababa, and the positive effect of job density on rents becomes negative when flood risk is high in Antananarivo. This relationship is not found in Dar es Salaam. The finding seems to suggest that access to jobs is an important factor driving people to settle in flood-prone areas. 2022-07-25T16:32:26Z 2022-07-25T16:32:26Z 2022-07 Working Paper http://documents.worldbank.org/curated/en/099947307212239604/IDU0b6fb06980cadc0453908efb0daf3293b3149 http://hdl.handle.net/10986/37754 English Policy Research Working Papers;10127 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Policy Research Working Paper Publications & Research Africa Africa Eastern and Southern (AFE) Africa Ethiopia Ghana Madagascar Tanzania |
repository_type |
Digital Repository |
institution_category |
Foreign Institution |
institution |
Digital Repositories |
building |
World Bank Open Knowledge Repository |
collection |
World Bank |
language |
English |
topic |
NATURAL DISASTERS DISASTER RISK MANAGEMENT HEDONIC REGRESSION POVERTY RESILIENCE URBAN HOUSING SUSTAINABLE CITIES URBANIZATION URBAN FLOODS ACCESS TO JOBS FLOOD RISK MANAGEMENT ACCRA ANTANANARIVO DAR ES SALAAM ADDIS ABABA HOUSING SECURITY RENT PRICES |
spellingShingle |
NATURAL DISASTERS DISASTER RISK MANAGEMENT HEDONIC REGRESSION POVERTY RESILIENCE URBAN HOUSING SUSTAINABLE CITIES URBANIZATION URBAN FLOODS ACCESS TO JOBS FLOOD RISK MANAGEMENT ACCRA ANTANANARIVO DAR ES SALAAM ADDIS ABABA HOUSING SECURITY RENT PRICES Erman, Alvina Dallmann, Ingrid Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
geographic_facet |
Africa Africa Eastern and Southern (AFE) Africa Ethiopia Ghana Madagascar Tanzania |
relation |
Policy Research Working Papers;10127 |
description |
This paper uses a hedonic property
price function to estimate the relationship between flood
risk and rents in four Sub-Saharan Africa cities: Accra,
Antananarivo, Dar es Salaam, and Addis Ababa. The analysis
relies on household survey data collected after flood events
in the cities. Flood risk is measured with self-reported
data on past flood exposure and perception of future risk of
flooding of households. The study finds that flood risk is
associated with lower rents in Accra, Antananarivo, Dar es
Salaam, and Addis Ababa, ranging from 14 to 56 percent
lower. In contrast, risk is associated with higher rent in
Dar es Salaam, which could be potentially attributed to a
combination of lack of awareness of flood risk among
renters, high transaction costs and omitted variable bias.
For example, only 12 percent of households living in
flood-prone areas were aware of the flood risk when they
moved in. In Antananarivo, job density is associated with
higher rents while in Accra and Addis Ababa, higher job
density is associated with lower rents. Results are negative
but not significant in Dar es Salaam. When interacting job
density with flood risk for each city, the negative effect
of job density on rents is higher (in absolute value) when
flood risk is high in Accra and Addis Ababa, and the
positive effect of job density on rents becomes negative
when flood risk is high in Antananarivo. This relationship
is not found in Dar es Salaam. The finding seems to suggest
that access to jobs is an important factor driving people to
settle in flood-prone areas. |
format |
Working Paper |
author |
Erman, Alvina Dallmann, Ingrid |
author_facet |
Erman, Alvina Dallmann, Ingrid |
author_sort |
Erman, Alvina |
title |
Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
title_short |
Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
title_full |
Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
title_fullStr |
Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
title_full_unstemmed |
Putting a Price on Safety : A Hedonic Price Approach to Flood Risk in African Cities |
title_sort |
putting a price on safety : a hedonic price approach to flood risk in african cities |
publisher |
World Bank, Washington, DC |
publishDate |
2022 |
url |
http://documents.worldbank.org/curated/en/099947307212239604/IDU0b6fb06980cadc0453908efb0daf3293b3149 http://hdl.handle.net/10986/37754 |
_version_ |
1764487843476930560 |