Observational analysis finds significant housing price effects in border and military regions, suggesting geopolitical threats influence real estate primarily in geographically vulnerable areas.
Prior studies have uncovered a variety of exogenous events or activities that can impact the housing prices in a region. For more than seventy years, tensions between North Korea and South Korea have run high, and are sometimes violent. This study examines the impact that different threats have on housing prices in South Korea. Using three different measures of threats by North Korea, we examine housing prices in thirteen different city regions in South Korea. The results indicate a significant impact for three of the regions, regions that have a large United States military presence or are very close to the demilitarized zone. However, the study does not find a significant impact for the country of South Korea in general, or most of the regions studied.
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Galbraith et al. (2024) studied this question.
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