Loss of Apartment Brand Premium Due to Building Collapse Incident

This study empirically analyzes the impact of a construction collapse incident in Gwangju Metropolitan City on the transaction prices of apartments bearing the same brand located in Seoul. Utilizing data from over 15,000 transaction prices, this study employs a differences-in-differences approach for empirical analysis. The results indicate that the price premium effect of the brand is reduced by up to approximately 6.3% due to the incident. This price effect manifests immediately and to be maintained two years after the incident. This underscores the managerial importance of apartment branding strategies in mitigating negative perceptions and their ripple effects beyond the brand and company to the property owners themselves. The empirical findings suggest that the premium on apartment brands is shaped not merely by physical attributes but by intangible factors such as brand recognition and preference.