Hedonic Models with Redevelopment Options under Uncertainty

John M. Clapp, Jyh Bang Jou, Tan Charlene Lee

研究成果: 雜誌貢獻期刊論文同行評審

22 引文 斯高帕斯(Scopus)

摘要

In the hedonic model, implicit market prices can be interpreted as the present values of rents per unit of each hedonic characteristic. But when rents rise, there may be substantial value associated with the option to redevelop to higher intensity per unit land value. In the presence of option value, we first demonstrate that hedonic linear regressions should include an additive nonnegative term for the value of the option. This term increases in the variance of the underlying stochastic process. If this term is omitted, then estimates of implicit market prices for desirable (undesirable) characteristics will be biased downward (upward). This prediction is supported by recent empirical studies. We further suggest that future empirical work can employ the nonlinear functional form derived from our theory.

原文???core.languages.en_GB???
頁(從 - 到)197-216
頁數20
期刊Real Estate Economics
40
發行號2
DOIs
出版狀態已出版 - 6月 2012

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