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Spatial heterogeneity and non-fungible token sales: Evidence from Decentraland LAND sales

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  • Yencha, Christopher

Abstract

This research is a first word on the real asset properties of a class of non-fungible tokens (NFTs), LAND. Although virtual, LAND exhibits real asset characteristics, satisfying conditions for hedonic price modeling. This study values access to local amenities in virtual space, showing evidence that LAND prices attenuate with distance to roads and attractions, despite access to near-instant and -costless travel. Furthermore, in demonstrating the costs of omitted variable bias due to spatial autocorrelation, this research stands as a warning to investors in and researchers of virtual property markets to treat NFTs as non-interchangeable and unique with regards to location.

Suggested Citation

  • Yencha, Christopher, 2023. "Spatial heterogeneity and non-fungible token sales: Evidence from Decentraland LAND sales," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323000028
    DOI: 10.1016/j.frl.2023.103628
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    References listed on IDEAS

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    Cited by:

    1. Liu, Jiatong & Zhu, You & Wang, Gang-Jin & Xie, Chi & Wang, Qilin, 2024. "Risk contagion of NFT: A time-frequency risk spillover perspective in the Carbon-NFT-Stock system," Finance Research Letters, Elsevier, vol. 59(C).
    2. Ante, Lennart & Wazinski, Friedrich-Philipp & Saggu, Aman, 2023. "Digital real estate in the metaverse: An empirical analysis of retail investor motivations," Finance Research Letters, Elsevier, vol. 58(PA).
    3. Proelss, Juliane & Sévigny, Stéphane & Schweizer, Denis, 2023. "GameFi: The perfect symbiosis of blockchain, tokens, DeFi, and NFTs?," International Review of Financial Analysis, Elsevier, vol. 90(C).
    4. Choi, Jaeseo, 2024. "A Study on the Applicability of NFT in the Entertainment Industry: Application of the Means-end Chain analysis and Laddering," 24th ITS Biennial Conference, Seoul 2024. New bottles for new wine: digital transformation demands new policies and strategies 302456, International Telecommunications Society (ITS).

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