Article

An Empirical Analysis on the Effect of the Abandoned Building Maintenance Project on the Price of Neighboring Apartments

Sung Hyo Hong1,*, Junhong Im2,*
Author Information & Copyright
1Department of Economics, Kongju National University, shong11@kongju.ac.kr
2Chungnam Institute, jhim0212@empas.com
*Corresponding author :

© Copyright 2021 Housing Finance Research Institute, Korea Housing Finance Corporation. This is an Open-Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Received: Sep 15, 2021; Revised: Dec 05, 2021; Accepted: Dec 13, 2021

Published Online: Dec 31, 2021

ABSTRACT

This paper empirically analyzes the changes in the price of apartments which are adjacent to an abandoned building before and after the selection of the building as a target of a maintenance project by the Ministry of Land, Infrastructure and Transport in Korea. The analytic model to capture a public value from the project is a difference-in-differences framework, and the data used for the analysis correspond to the actual transaction prices. According to the empirical results, after the selection of the abandoned building by the maintenance project, the prices of the neighboring apartments increased by approximately 82.6 dollars per one square meter of the apartments compared to those of apartments which are across a river. The existence of such positive external effects would support the public intervention in managing the abandoned buildings.

Keywords: Abandoned Building; Maintenance Project; Difference-In-Differences; House Price