5432887__Land_Values_

5432887__Land_Values_ - Land Values Running head: LAND...

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Land Values 1 Running head: LAND VALUES: A LITERATURE REVIEW Land Values: A Literature Review [Author’s Name] [Institution’s Name]
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Land Values 2 Land Values: A Literature Review Many researchers explore the land value–size relationship using sales of only large parcels, a few use sales on only small parcels, while some partition land sales data. The relationship between the size of a parcel of unimproved land and its value is a subject of interest in the literature, both from a theoretical and a practical perspective. From the original conjecture, that the relationship should be linear, to the model proposed herein, the challenge has been to better understand land values. As per general determinants of land values internationally, the importance of space for land use policy has grown with the development of urban areas and technological innovation. As, for instance, Raufer (1998) points out, during the industrial revolution cities could not easily grow beyond a given dimension unless they solved the sanitary sewerage and water drainage system, which typically involved the location of the network . Since then, many utilities compete for space, from water or gas pipes to optic fiber cables. The same pattern could be traced regarding some transportation systems, both public and private. It is very common to see parking spaces in city centers. And something similar has happened with buildings too. In places with severe weather conditions, some built-up spaces tend to be located. In other cities, it is the very high value of land that presses development, mainly in city centers. In Japan, for
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Land Values 3 instance, prime land has more and more been developed, for a wide variety of uses: retailing, offices, cultural, etc. As more uses compete for prime locations, the more relevant the subject of subsurface rights and values becomes. All instances face a common feature, though. The use of land causes many externalities. By definition, the presence of externalities modifies the social opportunity cost of space leaving the private cost unchanged, and leads the market to assign a non-optimal amount of the resource consumption from a social viewpoint.1 One of the possible ways to solve this problem is through comprehensive planning of individual sites, areas or regions. However, planning has traditionally focused its attention to surface and above-surface development. Furthermore, as construction and tunneling techniques improve, and development becomes more feasible and economically more desirable, the topic deserves closer attention. Consequently, this devotes its attention to the characterization of land as an economic good and to estimate its value. If the value could be estimated, the market failure to efficiently use land could be corrected through economic instruments, planning or other means. Now as per specific determinants for land values for
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This note was uploaded on 11/29/2010 for the course MANAGEMENT EM-14793 taught by Professor Lindaryaan during the Spring '08 term at Windsor.

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5432887__Land_Values_ - Land Values Running head: LAND...

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