Public Perceptions of Earthquake Risk and the Impact on Land Pricing: The Case of the Uemachi Fault Line in Japan

In this paper, we explore how land pricing reflects public perceptions of earthquake risk using officially appraised prices of land situated along the Uemachi fault, which lies on a north–south axis in the east of Japan's Osaka Prefecture. We reveal that land pricing along this fault has only incorporated fault-driven earthquake risk since residents and policy-makers first realized its potential following damage to the southern part of Hyogo Prefecture in a January 1995 earthquake along the Rokko–Awaji fault (an event now known as the Hanshin–Awaji earthquake). We find evidence of a discount of 20% in nonresidential land prices for every kilometre closer to the Uemachi fault line since the Hanshin–Awaji earthquake.