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Aging and Property Prices: A Theory of Very-Long-Run Portfolio Choice and Its Predictions on Japanese Municipalities in the 2040s

Author

Listed:
  • Yoshihiro Tamai

    (Department of Economics, Kanagawa University, Japan)

  • Chihiro Shimizu

    (Nihon University and Institute of Real Estate Studies National University of Singapore)

  • Kiyohiko G. Nishimura

    (University of Tokyo and National Graduate Institute for Policy Studies, Japan)

Abstract

In this paper we investigate the effect of aging population on property (land) prices. A theory of very-long-run portfolio choice is developed for a transition economy from young and growing to rapidly aging population and applied to estimate property price inflation in Japanese municipal markets. The results are stunning. The simulation results in which income factors are assumed to be fixed at the 2005-10 growth level suggest that the average residential property price (land price) in the Japanese municipalities may decrease by as much as 19 percent from the present to 2020, 24 percent to 2030, and 32 percent to 2040.

Suggested Citation

  • Yoshihiro Tamai & Chihiro Shimizu & Kiyohiko G. Nishimura, 2017. "Aging and Property Prices: A Theory of Very-Long-Run Portfolio Choice and Its Predictions on Japanese Municipalities in the 2040s," Asian Economic Papers, MIT Press, vol. 16(3), pages 48-74, Fall.
    • Handle: RePEc:tpr:asiaec:v:16:y:2017:i:3:p:48-74
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    References listed on IDEAS

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    Cited by:

    1. Suzuki, Masatomo & Asami, Yasushi & Shimizu, Chihiro, 2021. "Housing rent rigidity under downward pressure: Unit-level longitudinal evidence from Tokyo," Journal of Housing Economics, Elsevier, vol. 52(C).
    2. Masahiro Higo & Kiyohiko G. Nishimura & Yukie Sakuragawa, 2020. "Reforms and Crises in Government Statistics: The Case of Japan," Asian Economic Papers, MIT Press, vol. 19(2), pages 21-37, Summer.

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    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G00 - Financial Economics - - General - - - General

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