A Discontinuity Analysis of the 2015 Introduction of Bushfire Prone Area Maps

We study the introduction of wildfire risk maps, known as bushfire prone area maps, in Western Australia in 2015. Using property market transaction data and high-resolution GIS data, we apply a regression discontinuity design to examine the price differential for properties across the hazard discontinuity introduced by these maps. Results show that properties within bushfire prone areas are sold at a 4.2% lower price than those outside. Our analysis further suggests this discount is driven by an information shock, rather than pre-determined risk perception or stricter building regulations for risk-exposed properties.