CSRDA Discussion Paper Series

No. 72 In-home death: Impact on housing prices and rents in Tokyo Metropolitan Area
Takeru Sugasawa, Taisuke Sadayuki, Naonari Yajima, Mariko Nakagawa
Takeru Sugasawa
Taisuke Sadayuki
Naonari Yajima
Mariko Nakagawa
In-home deathHedonic approachStaggered DIDHousing marketStigmatized property
Goal 10: Reduced InequalitiesGoal 11: Sustainable Cities and CommunitiesGoal 16: Peace, Justice and Strong Institutions
Oshimaland.com, REINS data

This study utilizes unique information about death incidents in residential buildings to examine their effects on property prices and rents within the building. Analyzing data on death incidents and property transactions in the Tokyo Metropolitan Area through the staggered difference-in-differences approach, the study finds that a death incident results in approximately a 5% reduction in sale prices of nearby properties in the same residential building, while the negative spillover effect on rents is minimal. Further investigations attribute these divergent outcomes to the likelihood that buyers are better informed than renters about incidents in the neighborhood they move into before signing contracts. Despite a death incident being notified to prospective buyers and renters only if it occurred on the property to be transacted, our finding of the negative spillover effect suggests that, in accordance with current Japanese law, the notice obligation should be extended to transactions involving other properties in the same residential building. Additional analyses on heterogeneous impacts show that the negative effect on prices intensifies in housing markets characterized by lower demand and specific adverse conditions.