SIGNIFICANCE OF DEATHS WITHIN PRIVATE RESIDENTIAL DEVELOPMENTS ON PRICES

Abstract

This study aims to determine the significance of deaths within compounds on the price of transacted units in the context of Singapore. By accounting for locational and physical characteristics, a difference-in-difference approach using Ordinary Least Square regression was adapted to quantify the impact of deaths on prices. The volume of transaction of the afflicted development was then compared against its immediate comparables within a 300m radius to determine if there was lower demand for the stigmatised development.

On average, prices of units within developments afflicted by deaths due to murder are likely to experience a decrease in price by 2.2% within six months, 1.6% within a year and 0.6% within two years. The volume of transaction for these developments exhibited a general decrease for at least two quarters following the incident.

Developments afflicted by deaths due to accidents showed no significant decrease in prices after the respective incidents, but the volume of transactions decreased in most developments for up to two quarters.

Keywords: Death, Property Prices, Hedonic Pricing Model, Ordinary Least Square Regression