Abstract:Land prices may reflect a premium compensating for earthquake risks in that risk-averse agents tend to avoid land with a high degree of danger posed by earthquakes. The current paper empirically addresses that issue using a hazard map compiled for the entire region by the Tokyo Metropolitan Government in 1998. It finds strong evidence for the impact of earthquake risks on land pricing; land prices are substantially lower in risky areas than in safe areas even after controlling for other possible effects on land pricing. That impact became more evident in the 1990s than in the 1980s, indicating that households and firms were becoming more sensitive to earthquake risks. In addition, this paper carefully examines the consistency of the estimated magnitude of earthquake risk premiums within a framework of the expected utility hypothesis, thereby proving an extremely strong aversion toward a given unit of earthquake risks.
This paper considers three tenure modes -owner-owned housing, tenant-owned housing, and landlord-owned housing -and models the effect of the rental externality and tenure security on housing quality. We show theoretically that the rental externality has no impact on the housing quality of tenant-owned housing, but tenure security has an ambiguous effect when the user's utilization and the owner's maintenance are complements.We also show that the rental externality and tenure security both reduce landlord-owned housing quality when the user's utilization and the owner's maintenance are substitutes.Empirical investigation yields results that are consistent with the theoretical predictions.
This paper analyzes the impact of the old-age pension system for active employees on the employment behavior of elderly persons using the differences-indifferences method and the estimation of dynamic labor supply models. Data comes from "Surveys on Employment of Older Persons." Both the differences-indifferences method and the estimated dynamic labor supply models showed that the old-age pension system for active employees restrains the supply of workers in their early sixties (60 to 65 years of age). Effects of the reform of the system in 1995 were analyzed. The differences-indifferences method revealed that the reform affected the decision to work or not, especially for elderly persons on a small pension, but did not affect working hours. The estimated dynamic labor supply models revealed no significant marginal tax rate effects of the pension system around 1995. The estimated wage elasticities,
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