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Evaluating the cost and benefits of earthquake protection of buildings

Evaluating the cost and benefits of earthquake protection of buildings The purpose of this study is the evaluation of the cost and benefits of earthquake protection of buildings to verify whether the legislative push, through tax incentives, will produce results and lead to a redevelopment of private real estate assets.Design/methodology/approachThrough contingent valuation, this research aims to measure the propensity of homeowners to invest in the seismic security of their properties. The sample of homeowners was selected in a southern Italy city, which was characterized by a medium-high seismic hazard. The willingness to pay, once made independent from the family income, was compared with the actual cost of a seismic retrofitting technique to assess its cost-effectiveness.FindingsThe analysis developed on an example case shows that the economic sustainability of the intervention is only verified when considering the current tax incentives for this type of intervention.Practical implicationsChoosing to introduce a system to compulsory insurance against seismic risk could certainly be a strong incentive for the implementation of retrofitting interventions on private real estate assets. In this direction, investigations like this can be fundamental to establish the fair risk premium.Originality/valueThe need for effective seismic risk mitigation policies is also based on the growing awareness of the, often fatal, effects of seismic events, emphasized by the recent medium and high intensity events that hit Italy. The issue of the security of residential buildings is therefore a very topical issue in view of their high seismic vulnerability and the vast number of buildings requiring major seismic retrofitting. Therefore, the propensity of owners to intervene in improving the seismic performance of their properties can be crucial in seismic risk mitigation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of European Real Estate Research Emerald Publishing

Evaluating the cost and benefits of earthquake protection of buildings

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1753-9269
DOI
10.1108/jerer-09-2017-0029
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is the evaluation of the cost and benefits of earthquake protection of buildings to verify whether the legislative push, through tax incentives, will produce results and lead to a redevelopment of private real estate assets.Design/methodology/approachThrough contingent valuation, this research aims to measure the propensity of homeowners to invest in the seismic security of their properties. The sample of homeowners was selected in a southern Italy city, which was characterized by a medium-high seismic hazard. The willingness to pay, once made independent from the family income, was compared with the actual cost of a seismic retrofitting technique to assess its cost-effectiveness.FindingsThe analysis developed on an example case shows that the economic sustainability of the intervention is only verified when considering the current tax incentives for this type of intervention.Practical implicationsChoosing to introduce a system to compulsory insurance against seismic risk could certainly be a strong incentive for the implementation of retrofitting interventions on private real estate assets. In this direction, investigations like this can be fundamental to establish the fair risk premium.Originality/valueThe need for effective seismic risk mitigation policies is also based on the growing awareness of the, often fatal, effects of seismic events, emphasized by the recent medium and high intensity events that hit Italy. The issue of the security of residential buildings is therefore a very topical issue in view of their high seismic vulnerability and the vast number of buildings requiring major seismic retrofitting. Therefore, the propensity of owners to intervene in improving the seismic performance of their properties can be crucial in seismic risk mitigation.

Journal

Journal of European Real Estate ResearchEmerald Publishing

Published: Aug 17, 2018

Keywords: Contingent valuation; Seismic risk; Economic sustainability; Real estate assets; Structural retrofitting

References