Maarten Bosker, Professor of International trade and Economic development at Erasmus School of Economics, was interviewed on the NPO Radio 1 programme EenVandaag about the compensation scheme for entrepreneurs in the Eemsdelta earthquake area. With previous research, he determined a way to measure the decrease in value of a building.
Recently, entrepreneurs in the municipality of Eemsdelta in Groningen can receive compensation for the decrease in value of their business premises. This was previously only possible for living houses, but this scheme has therefore now been extended. The maximum amount entrepreneurs can receive is 40,000 euros. Bosker contributed to the creation of a model to estimate building depreciation several years ago. His method is based on previous research on the effect of flood risk on house prices.
Bosker and his co-researchers used "matching" and regression techniques, which searched for the most comparable property outside the earthquake area for each property. Based on this, they were able to determine an "image effect", which is the average decrease in value of a building due to the lying area in Groningen. Then to further refine the results, the earthquake history at that specific location is looked at.
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You can listen to the full episode from NPO Radio 1, 7 May 2024, here.