Scaling behavior in land markets

TL;DR

This study analyzes the distribution of land prices in Japan, revealing power law behavior and fluctuations that increase with price level, providing empirical data for modeling land market dynamics.

Contribution

First analysis of power law statistics in land markets using a large Japanese land price database, establishing empirical distribution patterns.

Findings

Land prices follow power law distributions

Price fluctuations amplify with higher land prices

Results consistent across multiple years

Abstract

In this paper we present an analysis of power law statistics on land markets. There have been no other studies that have analyzed power law statistics on land markets up to now. We analyzed a database of the assessed value of land, which is officially monitored and made available to the public by the Ministry of Land, Infrastructure, and Transport Government of Japan. This is the largest database of Japan's land prices, and consists of approximately 30,000 points for each year of a 6-year period (1995-2000). By analyzing the data on the assessed value of land, we were able to determine the power law distributions of the land prices and of the relative prices of the land. The data fits to a very good degree the approximation of power law distributions. We also found that the price fluctuations were amplified with the level of the price. These results hold for the data for each of the 6 annual intervals. Our empirical findings present the conditions that any empirically accurate theories of land market must satisfy.