We study how the announced future land rent increases capitalize into leasehold apartment prices. We investigate a case, where the City of Helsinki, Finland, announced over 15-fold rent increases for the ground lease contracts on residential land that were expiring in the near future. Our empirical strategy is based on a difference-in-differences design where we compare transactions of the leasehold units with those of near-identical freehold apartments. We find that before the first rent increase episode homebuyers were inattentive to their expected long-run housing expenses, which resulted in significant overpricing of leasehold apartments relative to corresponding freehold units. The results further suggest that housing market participants react on announced contract renewals and appear to learn the importance of the ground ownership feature when they are exposed to more and more information regarding rental contract updates.

Economists have been advocating for a land tax rather than a regular property tax. There are, however, several challenges to value land for tax purposes. Indeed, data on vacant land transactions are scarce, land and structure are conventionally traded in a bundle and it is hard to capture all factors that determine the value of land. We propose to use a new Bayesian spatial model and apply the model to the universe of vacant and improved land sales from Belgium in 2018. Our results indicate that vacant land prices are substantially more difficult to predict than house prices. However, the predictive performance of the spatial model improves considerably in comparison to a regular linear hedonic approach. Models that combine data from vacant and improved land are unable to improve the predictive accuracy.

While the granting of well-defined land rights to farmer families are recognized to be essential to promote land transfer and investment, the role of women’s formal land rights remains a debate. The literature defends female land rights from perspectives of empowerment and its welfare effects, which, however, has been called into doubts by gender-based assumptions and inconsistent evidence. This research alternatively proposes that the lack of statutory support to women’s land tenure not only refrain their incentives to invest in land but render them to till land by themselves to protect their shares of land revenues and prevent future losses. Based upon a national-wide survey in rural China, we reveal that registering women as joint landowners not only initiated 6.3% and 5.8% higher probabilities for families to transfer and invest in land, respectively, but also was correlated with higher investment amount. This research has implications for ongoing rural land reforms in China and other countries by providing both a novel empirical fact and a new theoretical insight in understanding the importance of women’s formal land rights.