IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v11y2022i5p664-d805665.html
   My bibliography  Save this article

Measuring Inadequacy in Compensation for the Compulsory Acquisition of Land: Evidence from Bengaluru, India

Author

Listed:
  • Jyoti Shukla

    (Faculty of Architecture, Building and Planning, University of Melbourne, Melbourne 3010, Australia)

  • Piyush Tiwari

    (Faculty of Architecture, Building and Planning, University of Melbourne, Melbourne 3010, Australia)

Abstract

Taking inspiration from the longstanding problem of inadequate compensation for the compulsory acquisition of private land for a public purpose, this research estimates the economic value of (i) future development potential of land or ‘hope value’; and (ii) depreciation in property value due to acquisition notification or ‘blight’. Using empirical data on property transactions conducted in the Bengaluru Mysore Infrastructure Corridor (BMIC) project area and registered with sub-registrar offices in Bengaluru India during 2007–14, this research innovatively combines the duration model and hedonic price model to estimate the above. Results indicate that the current mechanisms for compensation are inadequately compensating for the land. The loss of the hope value ranges between 2.39 to 8.35 times the market value of agricultural land in 2006 and loss due to blight is approximately 31 percent. Compensating for these losses ex-ante should induce fairness in the compulsory acquisition process and reduce arbitrariness in the valuation of essential components of a compensation package, thus unburdening the valuation responsibilities of the legal institutions. These findings empirically support the argument of payment of additional monetary compensation to the market value of land and provide a rational measure of the same.

Suggested Citation

  • Jyoti Shukla & Piyush Tiwari, 2022. "Measuring Inadequacy in Compensation for the Compulsory Acquisition of Land: Evidence from Bengaluru, India," Land, MDPI, vol. 11(5), pages 1-16, April.
    • Handle: RePEc:gam:jlands:v:11:y:2022:i:5:p:664-:d:805665
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/11/5/664/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/11/5/664/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rao, Jyoti, 2019. "A ‘capability approach’ to understanding loses arising out of the compulsory acquisition of land in India," Land Use Policy, Elsevier, vol. 82(C), pages 70-84.
    2. Gary Sams, 2017. "Compulsory purchase and compensation update 2017," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 35(5), pages 528-534, August.
    3. Piyush Tiwari & Hiroshi Hasegawa†, 2004. "Demand for Housing in Tokyo: A Discrete Choice Analysis," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 27-42.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Sudip Chattopadhyay, 1999. "Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market," Land Economics, University of Wisconsin Press, vol. 75(1), pages 22-38.
    6. Ram Singh, 2012. "Inefficiency And Abuse Of Compulsory Land Acquisition--An Enquiry Into The Way Forward," Working papers 209, Centre for Development Economics, Delhi School of Economics.
    7. Halvorsen, Robert & Pollakowski, Henry O., 1981. "Choice of functional form for hedonic price equations," Journal of Urban Economics, Elsevier, vol. 10(1), pages 37-49, July.
    8. Rao, Jyoti, 2018. "Fundamental Functionings of Landowners: Understanding the relationship between land ownership and wellbeing through the lens of ‘capability’," Land Use Policy, Elsevier, vol. 72(C), pages 74-84.
    9. Poirier, Dale J & Melino, Angelo, 1978. "A Note on the Interpretation of Regression Coefficients within a Class of Truncated Distributions," Econometrica, Econometric Society, vol. 46(5), pages 1207-1209, September.
    10. Graeme Newell & Nelson Chan & Evan Goodridge, 2011. "Risk assessment and compensation analysis of court decisions in compulsory land acquisition compensation cases in Australia," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 29(2), pages 210-219, March.
    11. Ghatak, Maitreesh & Mitra, Sandip & Mookherjee, Dilip & Nath, Anusha, 2013. "Land Acquisition and Compensation in Singur: What Really Happened?," CAGE Online Working Paper Series 121, Competitive Advantage in the Global Economy (CAGE).
    12. Drapikovskyi, Oleksandr & Ivanova, Iryna & Renigier-Biłozor, Małgorzata & Źróbek, Sabina, 2020. "How to assess the impact of hope on a change in the use of land on market value?," Land Use Policy, Elsevier, vol. 97(C).
    13. Jyoti Rao & Norman Hutchison & Piyush Tiwari, 2020. "Analysing the process of compulsory acquisition of land through the lens of procedural fairness: evidence from Scotland," Journal of Property Research, Taylor & Francis Journals, vol. 37(1), pages 62-84, January.
    14. Gary Sams, 2016. "Compulsory purchase and compensation update – 2016," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 34(4), pages 421-427, July.
    15. Jyoti Rao, 2018. "Functionings of Land," Springer Books, Springer, number 978-981-13-1441-4, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shr, Yau-Huo & Zipp, Katherine, 2016. "Valuing complementarity between environmental goods and housing attributes with the benefit function: An application to flood hazards," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235961, Agricultural and Applied Economics Association.
    2. Wilhelmsson, Mats, 2002. "Household Expenditure Patterns for Housing Attributes: A Linear Expenditure System with Hedonic Prices," Journal of Housing Economics, Elsevier, vol. 11(1), pages 75-93, March.
    3. Palmquist, Raymond B., 2006. "Property Value Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 16, pages 763-819, Elsevier.
    4. Chattopadhyay, Sudip, 2000. "The effectiveness of McFaddens's nested logit model in valuing amenity improvement," Regional Science and Urban Economics, Elsevier, vol. 30(1), pages 23-43, January.
    5. Sudip Chattopadhyay, 2002. "Divergence in alternative Hicksian welfare measures: the case of revealed preference for public amenities," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(6), pages 641-666.
    6. Patil, Vikram & Ghosh, Ranjan & Kathuria, Vinish & Farrell, Katharine N., 2020. "Money, Land or self-employment? Understanding preference heterogeneity in landowners’ choices for compensation under land acquisition in India," Land Use Policy, Elsevier, vol. 97(C).
    7. Alexandre Tangerini & Nils Soguel, 2005. "Evaluation monétaire de la qualité du paysage. Monetary valuation of the landscape quality," Urban/Regional 0507002, University Library of Munich, Germany.
    8. François Combes & Julien Harache & Martin Koning & Eric Morau, 2015. "Empirical Analysis of Freight Transport Prices Using the French Shipper Survey ECHO," Post-Print hal-01920396, HAL.
    9. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-14, September.
    10. Patrick C. Flower & Wade R. Ragas, 1994. "The Effects of Refineries on Neighborhood Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 319-338.
    11. David M. Brasington & Diane Hite, 2005. "Demand for Environmental Quality: A Spatial Hedonic Approach," Departmental Working Papers 2005-08, Department of Economics, Louisiana State University.
    12. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2013. "The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets," Journal of Economic Literature, American Economic Association, vol. 51(4), pages 1007-1062, December.
    13. DESBOIS, Dominique, 2015. "La qualité du lait a-t-elle un prix ? Une estimation hédonique de la valeur des attributs spécifiques du lait de vache," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(3), September.
    14. Mick Silver, 2016. "How to Better Measure Hedonic Residential Property Price Indexes," IMF Working Papers 2016/213, International Monetary Fund.
    15. Isaac F. Megbolugbe, 1991. "Hedonic Indices and Housing Programme Benefits," Urban Studies, Urban Studies Journal Limited, vol. 28(5), pages 773-781, October.
    16. Michael Greenstone & Justin Gallagher, 2008. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 951-1003.
    17. Ashton, John K. & Hudson, Robert S., 2017. "The price, quality and distribution of mortgage payment protection insurance: A hedonic pricing approach," The British Accounting Review, Elsevier, vol. 49(2), pages 242-255.
    18. Joaquín Delgado & Giovanni Wences, 2020. "A hedonic approach to the valuation of the effect of criminal violence on housing prices in Acapulco City," Empirical Economics, Springer, vol. 59(6), pages 2999-3018, December.
    19. Carlevaro, Fabrizio & Schlesser, C. & Binet , M. E. & Paul, M., 2007. "Econometric Modeling and Analysis of Residential Water Demand Based on Unbalanced Panel Data," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 8(4), pages 81-102.
    20. Mirko Moro & Karen Mayor & Seán Lyons & Richard S J Tol, 2013. "Does the Housing Market Reflect Cultural Heritage? A Case Study of Greater Dublin," Environment and Planning A, , vol. 45(12), pages 2884-2903, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:11:y:2022:i:5:p:664-:d:805665. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.