IES "Special Workshop"(Speaker:Jan Magnus)



Date and Time:Tuesday, 8 October 2019, 16:30-18:00
Speaker:Jan Magnus (Vrije Universiteit Amsterdam)
Title:"Earthquake Risk Embedded in Property Prices: Evidence from Five Japanese Cities"
Chair:Ryo Nakajima



West School Building, #527


Sponsored by Applied Economics Workshop and Econometrics Workshop



Event Reports

On October 8th 2019, Professor Jan Magnus of Vrije Universiteit Amsterdam and Tinbergen Institute delivered an econometrics/applied economics seminar based on his new research paper entitled "Earthquake Risk Embedded in Property Prices: Evidence from Five Japanese Cities". There were about fifteen to twenty participants.
He talked about an efficient estimation method to measure the impact of short-run and long-run earthquake risk on Japanese property prices.
He designed a hedonic property price model that allows for probability weighting, employ a multivariate error components structure, and develop associated maximum likelihood estimation and variance computation procedures.
In the presentation he showed that distorted short-run and long-run earthquake probabilities have a significantly negative impact on property prices. The approach that he developed enables us to identify the total compensation for earthquake risk embedded in property prices and to decompose this into pieces stemming from short-run and long-run risk, and to further decompose this into objective and distorted risk components.