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Land Price, Bubbles and Permit Raj


  • Gurbachan Singh


Even where adequate land is available for urban development, there can be high persistent land prices and high-rise buildings. Why? Are high prices always related to bubbles? This article examines these questions. It reconsiders whether high rural land price causes high urban land price or it is the other way round. It is shown that the root cause can lie elsewhere in the Permit Raj in the real estate sector. Dismantling this can make housing more affordable, and increase the economic surplus, potentially providing more room for welfare schemes including those related to land and housing.

Suggested Citation

  • Gurbachan Singh, 2016. "Land Price, Bubbles and Permit Raj," Review of Market Integration, India Development Foundation, vol. 8(1-2), pages 1-33, April.
  • Handle: RePEc:sae:revmar:v:8:y:2016:i:1-2:p:1-33

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    Bubble; dead-weight loss; floor area ratio; affordable housing schemes; fundamental value; shadow price; India;

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations


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