Disasters damaged economies and markets. Many studies inquired how calamities affected household risk perception and home value to understand the hazards' influences on expected utility. A remaining challenge is identifying equalizing difference, a necessary spatial equilibrium condition, keeping households indifferent among properties with different disaster risks. We fill this gap, analyzing a quasi-natural experiment with two events: the 2014 Kaohsiung Gas Explosions and subsequent disclosure of underground petrochemical pipelines. A spatial model with prospective reference theory predicts home-value changes after each event for areas with different risks and distinguishes the equalizing difference from price changes induced by risk adjustments. Difference-in-differences (DD) analyses uncover an equalizing difference worth 2.6% home value compensating for households' exposure to the petrochemical hazard, besides risk-adjustment price changes concerned by existing DD studies. The equalizing difference shrank with distance to hazard and time. Also, the neighborhood struck by the disaster has regained energy, a finding with implications for urban resilience.

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