THE IMPACTS OF EARTHOUAKE RISK ON THE HOUSING MARKET; EVIDENCE FROM TEHRAN REAL ESTATE AGENTS

Despite significant developments in technical aspects of earthquake reduction measures, their widespread implementation in communities has not occurred. One important factor is that the implementation of these measures requires additional costs. Apart from issues of who bears the additional costs and who benefits, there is the question of whether there is a willingness to pay for earthquake safety atoibutes of houses or not? Analyses of market prices under certain circumstances can provide a reasonable answer to this question. This is the aim of this study. A survey of real estate agents based on a contingent valuation method was conducted to find the effects of earthquake risk and hazard mitigation measures on the housing market in Tehran, Iran. The results show that under existing conditions there is a significant price difference between an earthquake resistant and unresistant house, and it is predicted that increasing information about earthquake risks in the city might have some positive impact on this difference.