1999
DOI: 10.3386/w7254
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Distortionary Taxation, Excessive Price Sensitivity, and Japanese Land Prices

Abstract: Japan has experienced turbulent behavior of land prices after World War II, especially after 1985. This paper first examines the explanatory power of a simple present-value model and shows its limitation.We then investigate two additional (not mutually exclusive) factors affecting the Japanese land price behavior: distortionary inheritance and capital-gains taxation, and excessive price sensitivity due to the nonWalrasian structure of the land market. Empirical results show that distortionary taxation is a maj… Show more

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Cited by 15 publications
(11 citation statements)
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“…It would be of interest to further investigate whether, and to what extent, Japanese households draw down their housing wealth. Nishimura et al (1999) argue that housing, and particularly land, operates as a tax shelter under Japan's tax structure (see also Seko, 1994aSeko, , 1994b.…”
Section: Do the Elderly Decumulate Their Housing Wealth?mentioning
confidence: 98%
“…It would be of interest to further investigate whether, and to what extent, Japanese households draw down their housing wealth. Nishimura et al (1999) argue that housing, and particularly land, operates as a tax shelter under Japan's tax structure (see also Seko, 1994aSeko, , 1994b.…”
Section: Do the Elderly Decumulate Their Housing Wealth?mentioning
confidence: 98%
“…In Japanese real estate market, it has been suggested that the variance of investors expectation distribution depends on the values of the factor loadings (Nishimura et al, 1998).…”
Section: Assumptions On Market Structurementioning
confidence: 99%
“…In contrast, an urgent seller may have to offer a lower price than the property's intrinsic value and may still have to wait for some time for the property to be sold. These kinds of strategic behavior make property prices in the imperfectly informed market behave differently from their intrinsic value (see Nishimura, 1999 for theory andNishimura et al, 1999 for empirical evidence). Consequently, resource allocation induced by market prices may be distorted, which is another source of social cost of imperfect information.…”
Section: Introductionmentioning
confidence: 99%