Land valuation in the metaverse: location matters

Mitchell Goldberg, Peter Kugler and Fabian Schär

Journal of Economic Geography, 2024, vol. 24, issue 5, 729-758

Abstract: In urban economics, transportation costs are a key determinant of land value. However, in virtual worlds, these costs are generally limited by the users’ ability to teleport. Drawing from urban and attention economic literature, we propose a theoretical model microfounded on user behavior. The model suggests that the relative value of land parcels hinges on their potential to attract visitors. Our empirical analysis supports this by demonstrating that location remains crucial in virtual worlds and highlighting the role of the teleportation threshold. We discuss the model’s general applicability, reaffirming the significance of location within most virtual worlds.

Keywords: attention economy; locally weighted regression; metaverse; NFTs (search for similar items in EconPapers)
JEL-codes: G41 R14 R33 (search for similar items in EconPapers)
Date: 2024
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