Learning from the Great East Japan Earthquake, the Japanese government enacted the “Tsunami Disaster Prevention Community Development Law.” Following the law’s enactment, local prefectures could designate areas that required special preparation for tsunami disasters as “tsunami disaster alert areas.” However, more than 10 years after the law’s enactment, only about half of the prefectures with estimated tsunami inundation have designated disaster alert areas. One reason for this lack of progress is that it is difficult to reach a consensus owing to concerns regarding falling land prices caused by rumors. Thus, this study presents an empirical analysis of the impact of designating tsunami disaster alert areas on land prices. The difference in land prices between designated tsunami disaster alert areas and other areas is analyzed using the difference-in-difference and propensity score matching methods, using data on 26 prefectures. The eight prefectures in the “treatment group” were designated as tsunami disaster alert areas before 2018. The other prefectures are assigned to the “control group.” The results show a significant difference between designated tsunami disaster alert areas and other locations. The results are confirmed in kernel matching bandwidths of 0.06 for the entire sample, sample of only residential use, and sample of an estimated tsunami inundation depth below 2 m. Thus, this study concludes that before designating tsunami alert areas, local prefectures must carefully consider the impact of such designation on land prices.

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