Geography, Regulation and the Value of Land

Posted: 1 Dec 2010

See all articles by John M. Quigley

John M. Quigley

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased); University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased)

Nils Kok

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

Paavo Monkkonen

The University of Hong Kong

Date Written: November 29, 2010

Abstract

Most analyses of the determinants of land prices in urban areas make inferences from data on housing transactions which combine payments for land and long-lived improvements. In contrast, this study utilizes a large sample of market transactions on unimproved land in a major US metropolitan area to investigate directly the determinants of urban land prices. Using all land transactions in nine counties in the Bay Area during the 2000-2009 period, we investigate the link between the physical access of sites, their topographical characteristics, and the prices of vacant land on those sites suitable for development for residential or nonresidential uses. We investigate in detail the link between variations in the quality of public services available in different parts of metropolitan areas and the price of raw land. Most importantly, our analysis documents the powerful link between variations in the regulatory environment within a metropolitan development and the prices commanded by unimproved land as an input to residential or commercial development.

JEL Classification: R3

Suggested Citation

Quigley, John M. and Kok, Nils and Monkkonen, Paavo, Geography, Regulation and the Value of Land (November 29, 2010). 46th Annual AREUEA Conference Paper, Available at SSRN: https://ssrn.com/abstract=1717032

John M. Quigley (Contact Author)

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased) ( email )

Berkeley, CA 94720-3880
United States
510-643-7411 (Phone)
510-643-7357 (Fax)

University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased) ( email )

Berkeley, CA 94720-1900
United States

Nils Kok

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

Paavo Monkkonen

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

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