The stigma of in-home death

This study investigates the impact of death incidents on property prices and rents within residential buildings in the  Metropolitan Area, in Japan. Employing a staggered difference-in-differences approach on a comprehensive dataset of death incidents and property transactions, the analysis reveals that in-home deaths lead to a persistent 5% reduction in sale prices for properties in the same building. However, the negative spillover effect on rents is minimal. The differential outcomes likely stem from buyers being more informed than renters about incidents before signing contracts.

The negative impact exhibits substantial heterogeneity, intensifying in housing markets with low demand or adverse conditions, such as high vacancy rates, high murder rates, and during offseasons. Deaths from murder, during summer, and in older properties also amplify the effect. The findings highlight deficiencies in Japan’s current in-home death disclosure policies, which only mandate disclosure for the affected property. The significant negative spillover effect suggests that the disclosure requirement should extend to the entire building to align with the current law’s intent.

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