Distortionary Taxation, Excessive Price Sensitivity, and Japanese Land Prices
Japan has experienced turbulent behavior of land prices after World War II, especially after 1985. This paper first examines the explanatory power of a simple present-value model and shows its limitation. We then investigate two additional (not mutually exclusive) factors affecting the Japanese land price behavior: distortionary inheritance and capital-gains taxation, and excessive price sensitivity due to the non-Walrasian structure of the land market. Empirical results show that distortionary taxation is a major culprit of high residential land price, and that the non-Walrasian price behavior magnifies the effect of underlying change in the market fundamentals.
|Date of creation:||Jul 1999|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fujita, Masahisa & Kashiwadani, Masuo, 1989. "Testing the efficiency of urban spatial growth: A case study of Tokyo," Journal of Urban Economics, Elsevier, vol. 25(2), pages 156-192, March.
- Douglas Stone & William T. Ziemba, 1993. "Land and Stock Prices in Japan," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 149-165, Summer.
- Takatoshi Ito & Tokuo Iwaisako, 1996.
"Explaining Asset Bubbles in Japan,"
Monetary and Economic Studies,
Institute for Monetary and Economic Studies, Bank of Japan, vol. 14(1), pages 143-193, July.
- Kanemoto, Yoshitsugu, 1997. "The housing question in Japan," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 613-641, November.
- Neil Shephard, 2005.
2005-W17, Economics Group, Nuffield College, University of Oxford.
- Michael M. Hutchison, 1994.
"Asset Price Fluctuations in Japan: What Role for Monetary Policy?,"
Monetary and Economic Studies,
Institute for Monetary and Economic Studies, Bank of Japan, vol. 12(2), pages 61-83, December.
- Michael M. Hutchison, 1993. "Asset price fluctuations in Japan: what role for monetary policy?," Pacific Basin Working Paper Series 93-11, Federal Reserve Bank of San Francisco.
- Robert F. Engle & Victor Ng & Michael Rothschild, 1988.
"Asset Pricing with a Factor Arch Covariance Structure: Empirical Estimates for Treasury Bills,"
NBER Technical Working Papers
0065, National Bureau of Economic Research, Inc.
- Engle, Robert F. & Ng, Victor K. & Rothschild, Michael, 1990. "Asset pricing with a factor-arch covariance structure : Empirical estimates for treasury bills," Journal of Econometrics, Elsevier, vol. 45(1-2), pages 213-237.
- King, Mervyn & Sentana, Enrique & Wadhwani, Sushil, 1994.
"Volatility and Links between National Stock Markets,"
Econometric Society, vol. 62(4), pages 901-33, July.
- Mervyn King & Enrique Sentana & Sushil Wadhwani, 1990. "Volatiltiy and Links Between National Stock Markets," NBER Working Papers 3357, National Bureau of Economic Research, Inc.
- Kiyohiko G. Nishimura, 1999. "Expectations Heterogeneity and Excessive Price Sensitivity in the Land Market," The Japanese Economic Review, Japanese Economic Association, vol. 50(1), pages 26-43, 03.
- Carlson, John A & Parkin, J Michael, 1975. "Inflation Expectations," Economica, London School of Economics and Political Science, vol. 42(166), pages 123-38, May.
- Ng, Victor & Engle, Robert F. & Rothschild, Michael, 1992. "A multi-dynamic-factor model for stock returns," Journal of Econometrics, Elsevier, vol. 52(1-2), pages 245-266.
- Takatoshi Ito, 1994. "Public Policy and Housing in Japan," NBER Chapters, in: Housing Markets in the United States and Japan, pages 215-238 National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:7254. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.