Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 1999. / Includes bibliographical references (leaves 49-52). / This paper examines the validity of the option-based investment model as opposed to the neoclassical investment model in the decision-making of commercial real estate development, using aggregate real estate data from Japan. I particularly focus on the effect of uncertainty because it is the central difference between the two models. I specify a structural model in order to incorporate the interactions between supply and demand in the real estate asset market. In order to conduct detailed empirical tests for a long period of time, I set three data series. The Long Series uses quarterly data of 25 years and Short Series 1 and Short Series 2 use monthly data of about 15 years. I find strong evidence that supports the option-based investment model. Especially in the supply equation, total uncertainty has significant effects on the investment decision. A lag structure is found in the effect of total uncertainty. The parameters for other variables also generally favor the option-based model. In the demand equation, too, the results strongly support the option-based investment model. It should be concluded from these results that various kinds of real options must be incorporated in investment and economic models. / by Jiro Yoshida. / S.M.
| Identifer | oai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/70726 |
| Date | January 1999 |
| Creators | Yoshida, Jiro, 1970- |
| Contributors | Timothy J. Riddiough., Massachusetts Institute of Technology. Dept. of Urban Studies and Planning., Massachusetts Institute of Technology. Dept. of Urban Studies and Planning. |
| Publisher | Massachusetts Institute of Technology |
| Source Sets | M.I.T. Theses and Dissertation |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | 53 leaves, application/pdf |
| Rights | M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission., http://dspace.mit.edu/handle/1721.1/7582 |
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