Although flood maps were publicly accessible in Flanders (Belgium) prior to the reform, the policy ensured that risk information was prominently displayed in listing advertisements, making it salient early in the home-buying process (2/5)
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Using DiD and Diff-in-Disc analyses, we find that house prices fall by 4% in medium-risk zones after disclosure. In high-risk areas, effects are concentrated at flood-risk boundaries, indicating risk was already priced deep inside high-risk areas, but not near the edges (3/5)
The results suggest that well-designed, early-stage risk disclosure works! Especially when risks are less visible or for socioeconomically vulnerable households.
Link to the paper: papers.ssrn.com/sol3/papers.... (5/5)
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We find stronger price declines in disadvantaged neighborhoods with below-median income, education or above-median unemployment. In addition, fewer buyers from disadvantaged neighborhoods purchase homes in medium-risk areas after the disclosure. (4/5)