Land Valuation in the Metaverse: Location Matters

49 Pages Posted: 1 Oct 2021 Last revised: 7 Mar 2022

See all articles by Mitchell Goldberg

Mitchell Goldberg

University of Basel - Center for Innovative Finance

Peter Kugler

University of Basel

Fabian Schär

Center for Innovative Finance, University of Basel; University of Basel - Economics Department

Date Written: September 29, 2021

Abstract

We analyze locational preferences of investors in the metaverse. The setting allows us to compile a unique data set with parcel- and investor-specific observations. We find strong evidence that location matters even in a virtual world with negligible transportation costs. Locational preferences come in two distinct forms. Investors are willing to pay substantial premiums for (1) land in close proximity to popular landmarks, and (2), for parcels with more memorable addresses. Virtual land incorporates characteristics from real estate and domain name markets. We argue that these effects are primarily driven by commercial land use and visitor density expectations.

Keywords: Attention Economy, Blockchain, Location Choice, Metaverse, NFTs

JEL Classification: G41, M37, R14, R33, R41

Suggested Citation

Goldberg, Mitchell and Kugler, Peter and Schär, Fabian, Land Valuation in the Metaverse: Location Matters (September 29, 2021). Available at SSRN: https://ssrn.com/abstract=3932189 or http://dx.doi.org/10.2139/ssrn.3932189

Mitchell Goldberg (Contact Author)

University of Basel - Center for Innovative Finance ( email )

Basel
Switzerland

Peter Kugler

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland
+41 61 267 3344 (Phone)
+41 61 267 3340 (Fax)

Fabian Schär

Center for Innovative Finance, University of Basel ( email )

Basel, 4001
Switzerland

HOME PAGE: http://cif.unibas.ch

University of Basel - Economics Department ( email )

Petersgraben 51
Basel, CH-4003
Switzerland

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