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How to assess the impact of hope on a change in the use of land on market value?

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  • Drapikovskyi, Oleksandr
  • Ivanova, Iryna
  • Renigier-Biłozor, Małgorzata
  • Źróbek, Sabina

Abstract

This article is devoted to common yet quite specific approaches to valuation practice tasks that are involved in determining the market value of real properties in areas of possible land use changes. An intrinsic element of market value in such areas is the hope value, for which an option pricing model is used quite frequently.

Suggested Citation

  • Drapikovskyi, Oleksandr & Ivanova, Iryna & Renigier-Biłozor, Małgorzata & Źróbek, Sabina, 2020. "How to assess the impact of hope on a change in the use of land on market value?," Land Use Policy, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:lauspo:v:97:y:2020:i:c:s0264837719319957
    DOI: 10.1016/j.landusepol.2020.104746
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    References listed on IDEAS

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    1. Gerald Buetow, Jr. & Joseph Albert, 1998. "The Pricing of Embedded Options in Real Estate Lease Contracts," Journal of Real Estate Research, American Real Estate Society, vol. 15(3), pages 253-266.
    2. George W. Kutner & James A. Seifert, 1989. "The Valuation of Mortgage Loan Commitments Using Option Pricing Estimates," Journal of Real Estate Research, American Real Estate Society, vol. 4(2), pages 13-20.
    3. Titman, Sheridan, 1985. "Urban Land Prices under Uncertainty," American Economic Review, American Economic Association, vol. 75(3), pages 505-514, June.
    4. David Kim Hin Ho & Eddie Chi-man Hui & Muhammad Faishal Bin Ibrahim, 2009. "Asset Value Enhancement of Singapore’s Public Housing Main Upgrading Programme (MUP) Policy: A Real Option Analysis Approach," Urban Studies, Urban Studies Journal Limited, vol. 46(11), pages 2329-2361, October.
    5. Oleksandr DRAPIKOVSKYI & Iryna IVANOVA, 2017. "Valuation for the Purposes of Financing Real Estate Development," The Valuation Journal, The National Association of Authorized Romanian Valuers, vol. 12(1), pages 4-41.
    6. Maurizio d'Amato & Paola Amoruso, 2016. "The Valuation of Hope Value in a Vacant Land Using Real Option Theory," ERES eres2016_8, European Real Estate Society (ERES).
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    Cited by:

    1. Bieda, Agnieszka & Dybał, Łukasz, 2021. "Assessing correctness of local spatial policy using information on commencement of construction investment process," Land Use Policy, Elsevier, vol. 100(C).
    2. Jyoti Shukla & Piyush Tiwari, 2022. "Measuring Inadequacy in Compensation for the Compulsory Acquisition of Land: Evidence from Bengaluru, India," Land, MDPI, vol. 11(5), pages 1-16, April.
    3. Brzezicka Justyna & Kobylińska Katarzyna, 2021. "An Analysis of the Income and Price Elasticity of Demand for Housing in View of Price Dynamics on the Residential Property Market," Real Estate Management and Valuation, Sciendo, vol. 29(4), pages 97-110, December.
    4. Vasco Capela Tavares & Fernando Tavares & Eulália Santos, 2022. "The Value of Farmland and Its Determinants—The Current State of the Art," Land, MDPI, vol. 11(11), pages 1-14, October.

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