The objective of this study is to attempt a new land price estimation model where the regional factors being essential for the model for estimation of the officially assessed land price (or the OALP estimation model, on which the mass estimation of th...
The objective of this study is to attempt a new land price estimation model where the regional factors being essential for the model for estimation of the officially assessed land price (or the OALP estimation model, on which the mass estimation of the officially assessed individual land price is based) are taken into account, so as to overcome the limitations of traditional models, thereby enhancing the public trust on the officially assessed individual land price (OAILP). This paper reviews the characteristics and issues of the traditional models, and seeks the alternative methods to improve or overcome them. To do so, Seoul - a metropolis where public grievances occur in complex and various ways in regard to the OAILP - was selected as a subject of study. For the convenience of study, this paper divides the entire Seoul area into 3 zones on the basis of land pricing factors, and analyzes the OALP data of the reference land sites provided by the sample municipalities in the said 3 zones. That is, Seoul is divided into a Gangnam Zone having the characteristics of a new town, a Downtown Zone having the characteristics of a commercial & business center, and Gangbuk Zone having the characteristics of a traditional town; and Gangnam-gu, Jung-gu and Unpyong-gu were selected as a sample municipality of them respectively.Here, the Hedonic land price function and the 2 Step Procedure function are estimated, which they take, as a dependent variable, the 4,434 Reference Lands in the three Gu''s appraised in 2005, and which takes, as a explanatory variable, the land attribute data of the zones. The type of estimation function is of a semi-linear type where the value of a dependent variable is log-transformed to reduce the asymmetry and heteroscedasticity of a function. Upon function estimation, a traditional model (Model Ⅰ) where regional factors are not taken into account, a traditional model (Model Ⅱ) where regional factors are taken into account, and a 2 Step Procedure model (Model Ⅲ) which is an alternative for the traditional models are established; and then the estimation results from those 3 models are compared and analyzed. The number of basic codes of urban land attribute items for the year of 2005 Reference Land is 18, and that of sub-attribute items is 207. The explanatory variables applied to the function estimation are the sub-attribute items. For the convenience of study, this paper re-classifies the sub-attribute items into 31 categories based on the attribute criteria of the basic codes, and newly adds 3 accessibility variables (classified as individual factors) and 7 regional variables (classified as regional factors). The 3 individual factors added include the distance from the reference land to the subway station, the distance from the reference land to a nearby large-scale shopping mall, and the number of subway stations within 300 meters from the reference land. In determining the distance for the accessibility factor variables, the linear distance to an object was measured via GIS work referring to a digital map. The new regional factor variables include the number of subway stations per Dong (indicating the accessibility variables of sub-zones); ratio of commercial district per Dong (indicating the zoning density of sub-areas); ratio of gross floor area of commercial & business facilities per Dong (indicating the building density of sub-areas); and population density, ratio of apartments to total residential housing, and distribution of school count per Dong (indicating the social factor of sub-zones); and the per-capita burden of local taxes per Dong (indicating the income level and economic factor of sub-zones).The results of analysis are summarized as follows:First, the value of the coefficient of estimation(R2) indicating the land price estimable ability is 0.910 for the Model Ⅰ, 0.942 for the Model Ⅱ, 0.912 for the 1st step of the Model Ⅲ (where individual factors are applied), and 0.759 for the 2nd step of the Model Ⅲ (where regional factors are applied). Thus, the descriptive ability of such models has been appeared generally high. The R2 value of the Model Ⅲ-2 is relatively lower than that of the 1st step, and the major reason of which seems to be that the number of regional factor variables applied to the 2nd step function estimation is smaller than that of individual factor variables of the 1st step. The number of the explanatory variables applied to the 1st step model equation is 34, while that of the 1st step in the 2 Step Procedure model is only 7 (regional factor variables).Second, when the Model Ⅱ are compared with the Model Ⅲ, the number of variables which are out of the significant range of 5% is 10 from total 41 variables for both models, respectively.Third, in the traditional model (Model Ⅱ) with regional factors considered, the t-values of 2 regional factor variables from 7 regional factor variables applied to the function estimation equation are out of the 5% significant range. In the Model Ⅲ, however, all of the 7 regional factor variables are significant within the 5% range, suggesting that this model (Model Ⅲ) is superior to the Model Ⅱ in terms of the significance of the regional factor variables per Dong, a sub-market. The estimation of land price using the 2 Step Procedure linear model may be particularly useful in analyzing the real estate market of other metropolitan areas where there are various land price estimation factors per sub-market, and the degree of impact thereof differs accordingly. Given the characteristics of the 2 Step Procedure model, change of regional factors may enable more definite evaluation of its impact on the OAILP, when compared to the Hedonic function.Fourth, regarding the accessibility factors, the coefficient value of the distance to subway station (V14) and distance to a large-scale shopping mall (V16) in the new variables shows negative(-) effect in terms of distance, and it is common for all the three models - Model Ⅰ, Model Ⅱ and Model Ⅲ. The function estimation equation demonstrates the land price theory: in case of the accessibility variable, the further the distance is, the lower the land price becomes.Fifth, from the 7 regional factor variables of the 2nd step of the 2 Step Procedure model (Model Ⅲ-2) whose t-value shows significance at the 5% level, the said value of 6 variables excepting the population density per Dong (V20) shows negative(-) effect. This suggests that, if a Dong has more number of subway stations, higher ratio of commercial district, higher ratio of gross floor area of commercial & business facilities, higher ratio of apartments to total residential housing, more number of schools, and heavier per-capita burden of local taxes, then its land price is boosted further. Sixth, contrary to our expectation, the population density (one of social factors influencing the estimation of land price) has a negative(-) impact on the land price; and the two major reasons of which are summarized as follows: 1) the significant portion of the population in the high-density Dong in a same municipality have the income below the average level, and their houses are clustered in a narrow residential space, thus having a negative(-) impact on the land price; and 2) the urban people''s dwelling is different from their work place. The result of comparing the average OALP of the Reference Land per Dong with population density per Dong shows the followings: the specified Dong in the Jung-gu downtown where land price is high is crowded with floating population, but the statistical index of its population density is lower than that of a residential district of suburban areas because of donut phenomenon. This suggests that there is a limit in using only the static population index as a land price estimation variable without considering the floating population since the land price is more influenced by the actual floating population than by the figures recorded in a resident registry.To reflect the land pricing factors unique to the real estate sub-markets on the OAILP estimation model, it is required to enhance the land price estimatability by increasing the number of land attribute items for survey which have been used by municipalities in common. In this study, the R2 value of the traditional model (Model Ⅱ) adopting new factors (e.g. regional factors) is higher than that of the traditional model (Model Ⅰ) adopting only the existing variables, showing that the land price estimatability of the former has been improved.Furthermore, in order to reflect the various regional factors of sub-markets on the OALP estimation model, it is required to attempt alternative models such as the 2 Step Procedure model. The 7 regional factor variables whose t-value is significant in the 2nd step of 2 Step Procedure model (Model Ⅲ-2) are recognized as important regional factor variables which can be adopted to enhance the land price estimatability through the improvement of OALP estimation model in the future.Nowadays, metropolitan areas are developed to have higher development density, lower building-to-land ratio and higher floor area ratio due to the redevelopment of urban centers and development of subcenters in the suburbs, compared to the small- and medium-sized city or none urban areas. Accordingly, the land price structure of metropolitan areas tend to have more complex hierarchies and sub-classifications as it goes down to sub-markets. In the real estate market of metropolises, various and complex land pricing factors are created and changed at a local level. Only through the adjustment of scales in the Comparative Reference Table prepared by selecting the limited number of variables, it is difficult to take into account immediately the drastic changes in the land pricing factors of metropolitan areas resulting from urban development in a realistic way. In practice, the limitation...