Effect of forest fires on housing prices: Case study from Pohang City, South Korea

Urban forest fires have become a global concern, severely impacting human lives, property, and the environment. Pohang City in South Korea experienced its first urban forest fire on March 9-10, 2013, significantly damaging residential areas due to the city's expansion into mountainous regions. This study uses a Regression Discontinuity Design to analyze the effects of the fire on housing prices in Pohang. The results show a notable price decline near the fire-damaged areas, with a 16.5 % drop within the 50-m zone and a 6.9 % decrease within the 400-m zone. The negative impact persists, with a 6 % reduction within the 1000-m zone after a two-month lag. These findings emphasize the importance of understanding the spatial and temporal dynamics of urban forest fires in real estate markets. The study offers valuable insights into the complex relationship between urban forest fires and housing prices, providing guidance for disaster preparedness, risk mitigation, and recovery efforts.