24. Negative Exponential Land Price Function and Impacts of Sale and Deemed Tax on the City Development: Analysis with an Alternative to Alonso–Muth Model in the Dynamic Content

This aimed to derive an exponential land price function based on explicit analytical assumptions on the spatial and dynamic urban model which is an alternative to conventional Alonso–Muth type model in a dynamic context. With homogeneous space conventionally adopted, it was assumed that landowners are differentiated with the distance to the CBD boundary so that landowners having land located at outer location ring cannot sell their land with higher land price than landowners having land at inner location ring. It was shown that dynamic land price function becomes negative exponential function in the distance to the city center and its growth rate becomes discounting rate in case land demand function is negative exponential function in land traded which is faced by differentiated landowners. Tax on sales of tracts of land and deemed tax on reserved land for speculation were introduced into the model and their impact on the urban sprawl was analyzed. It was shown that both deemed tax on reserved land and revenue tax on utilization of land enhance city development although urban sprawl is inevitable elsewhere and increase in tax rates will shorten the period when urban sprawl is observed in the city. Conversely, sale tax itself is of course neutral to the speculation but its effects become unclear if it is charged together with deemed tax. The differentiation of landowners was extended to incorporate other location attributes than the distance to the city center and meaning of non-geographical space was analyzed on which human activities are developed. A possible experimental analysis was suggested which utilizes estimated hedonic land price function.