Estimating Consumer Valuation of Earthquake Risk: Evidence from Japanese Housing Markets

The relationships between seismic risk and rental and owner- occupied housing prices in the whole of Japan are examined. The empirical results from hedonic regressions with earthquake risk indices suggest that: (1) earthquake occurrence probability has a significantly negative effect on monthly housing rent, (2) the effect of earthquake probability seems to depend on the characteristics of the individual housing unit (e.g. age of dwelling) for owner-occupied housing, (3) the estimated risk premium is much larger for older buildings, and (4) the share of quake-resistant dwellings in the neighborhood area is significantly and positively related to the housing price of the individual unit. These results suggest that anti-seismic policies that target specific groups of dwellings, such as rental houses and older buildings, help to mitigate welfare loss due to earthquakes.Earthquake; Hedonic price model; Risk premium

Price competition in the spatial real estate market: Allies or rivals?

This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with differentiated products suggests that the price response of real estate may differ when properties in the vicinity are priced by an affiliated firm or one\u27s own firm. This is because the firm can maintain the collusive state if real estate prices in the neighborhood are priced by allies, whereas it loses it if prices are priced by rivals. To examine this prediction, a spatial autoregressive model with autoregressive and heteroskedastic disturbances, including a share of allies in the vicinity, is estimated using data on the residential condominium market in central Tokyo. Empirical results provide support for the model prediction

Underutilized Housing in an Aging Society: How Bequest Motives Affect Housing Choices

This study sheds light on the underutilization of housing stock among elderly households and examines the role played by bequest motives and inheritance taxes. Data from Japanese households reveal that underutilized rooms are prevalent, particularly in non-relocating elderly households who have recently renovated their homes. Our findings indicate that the motive to bequeath housing leads to the underutilization of housing through reduced mobility and increased renovations, even among working-age households. The underutilization of housing by elderly households leads to an inefficient allocation of resources in an aging society and exacerbates the problem of housing affordability. Keywords: underutilized housing stock, tax distortions, mobility, renovation, aging society, IV probit model, Japan, 3SLS JEL: J14, H21, R2

Price competition in the spatial real estate market: Allies or rivals?

This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with differentiated products suggests that the price response of real estate may differ when properties in the vicinity are priced by an affiliated firm or one's own firm. This is because the firm can maintain the collusive state if real estate prices in the neighborhood are priced by allies, whereas it loses it if prices are priced by rivals. To examine this prediction, a spatial autoregressive model with autoregressive and heteroskedastic disturbances, including a share of allies in the vicinity, is estimated using data on the residential condominium market in central Tokyo. Empirical results provide support for the model prediction

Price competition in the spatial real estate market: Allies or rivals?

This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with differentiated products suggests that the price response of real estate may differ when properties in the vicinity are priced by an affiliated firm or one's own firm. This is because the firm can maintain the collusive state if real estate prices in the neighborhood are priced by allies, whereas it loses it if prices are priced by rivals. To examine this prediction, a spatial autoregressive model with autoregressive and heteroskedastic disturbances, including a share of allies in the vicinity, is estimated using data on the residential condominium market in central Tokyo. Empirical results provide support for the model prediction

Downward-sloping term structure of lease rates: a puzzle

A model of the term structure of lease rates in a frictionless economy is developed and its predictions are compared with data on residential leases in Japan. The model shows that the initial lease rate for a cancellable lease must be set higher than that for a non-cancellable lease because the former rate will be repeatedly adjusted downward when the market rent decreases. More importantly, the term structure of lease rates is always upward-sloping for cancellable leases. Empirical findings show a sharp contrast with the theory. Fixed-term lease rates are often higher than open-ended long-term lease rates. Moreover, in the fixed-term lease sample, the term structure of lease rates is downward-sloping. The term structure is also heterogeneous by tenant’s income

Downward-sloping term structure of lease rates: a puzzle

A model of the term structure of lease rates in a frictionless economy is developed and its predictions are compared with data on residential leases in Japan. The model shows that the initial lease rate for a cancellable lease must be set higher than that for a non-cancellable lease because the former rate will be repeatedly adjusted downward when the market rent decreases. More importantly, the term structure of lease rates is always upward-sloping for cancellable leases. Empirical findings show a sharp contrast with the theory. Fixed-term lease rates are often higher than open-ended long-term lease rates. Moreover, in the fixed-term lease sample, the term structure of lease rates is downward-sloping. The term structure is also heterogeneous by tenant’s income

Intergenerational Correlation of Household Wealth : Evidence from the JHPS Second-Generation Supplement

IPSE DP 2021F00

東京大都市圏における新築マンション価格のヘドニック分析

In this paper, newly built condominium price hedonic models in Tokyo metropolitan area are estimated. The models are fitted for three areas, which are spanned from the CBD (Tokyo and Shinjuku station) to three prefectures, Chiba, Saitama, and Kanagawa, to make clear the price difference proportional to the distance from the CBD, and to make quality adjusted price indices. From the estimated results, we find that quality adjusted prices are declining in three areas from 1993 to 2000, and that there are nonlinear relationship between the price and the distance from the CBD to Kanagawa area