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Why Doesn’t the Hong Kong Government Sell More Public Land?

Author

Listed:
  • Saku Aura

    () (University of Missouri and CESifo)

  • Francis K Cheung

    () (Chinese University of Hong Kong - Department of Decision Sciences & Managerial Economics)

  • Shawn Ni

    () (University of Missouri)

Abstract

Why doesn’t the Hong Kong government sell more of its enormous land holding to lower the city’s high housing price and increase the residents’ small living space? We answer thequestion in an overlapping generations framework. We show that while a rapid and complete privatization of government land is efficient in the absence of externalities; it is made politically difficult by a compensation gap, when the losses of current property owners are greater than the government revenue from land sales. We argue that the cross-country diversity of government land ownership owes to historical incidents in some countries (such as the U.S. in the 19th century) that allowed disposal of government land without filling the compensation gap and the absence of such incidents in others (such as Hong Kong).

Suggested Citation

  • Saku Aura & Francis K Cheung & Shawn Ni, 2015. "Why Doesn’t the Hong Kong Government Sell More Public Land?," Working Papers 1511, Department of Economics, University of Missouri.
  • Handle: RePEc:umc:wpaper:1511
    as

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    File URL: https://economics.missouri.edu/working-papers/2015/wp1511_aura_ni.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    government land sale; compensation gap;

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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