Environmental Disasters and Property Values: Evidence from Nepal's Forest Fires

Abstract

This article employs satellite data on real-time active fire locations to evaluate the impact of forest fires on property values in Nepal. Results show that an additional unit increase in fire radiative power from last month's forest fires causes a 0.61% decrease in residential property values. Property values decline by 4.48% for every additional unit increase in the number of forest fire incidents over the last year. These estimates suggest that policymakers should prioritize wildfire risk awareness and fire prevention programs in areas with higher levels of declined property values associated with recurring forest fire incidents.