Developer Heterogeneity and Competitive Land Bidding

Zhi Dong () and Tien Foo Sing

The Journal of Real Estate Finance and Economics, 2014, vol. 48, issue 3, 466 pages

Abstract: This paper shows that ignoring differences in developers’ competitive strength and their bidding behavior in land auctions leads to distorted valuation of urban lands. Using the government’s land sale data in Singapore for the sample periods 1990–2011, we found that after controlling for location and space attributes, bid prices for lands are significantly influenced by heterogeneity effects of developers. The two heterogeneity measures used in our study, which are the bid spreads and historical activities in tenders, appear to have significant and positive effects on land bids. When we control for selectivity biases through winning probability of bidders and the bid scale (>10,000 square meters, and >S$50 million in value), we found that bid prices increase when bidders’ winning selectivity is considered. For large bid, bidders’ selectivity, if ignored, will lead to underestimation of the bid prices. The results affirm the hypothesis that heterogeneity in bidders and their selectivity in bidding strategies could have significant impact on the urban land valuation. Copyright Springer Science+Business Media New York 2014

Keywords: Developers’ heterogeneity; Urban land valuation; Selectivity bias; Public land sales; First-price sealed-bid auction; D44; R14 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11146-013-9408-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jrefec:v:48:y:2014:i:3:p:441-466

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11146/PS2

DOI: 10.1007/s11146-013-9408-1

Access Statistics for this article

The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

More articles in The Journal of Real Estate Finance and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().