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The paper fits a hedonic regression model to the sales of condominium units in Tokyo over the period 2000-2015. The problem is complicated by the need to decompose the selling price of a unit into a component that can be attributed to the structure area of the unit and another component that can be attributed to the unit’s share of land value. There is very little information on the value of condominium land and so this paper develops a methodology for reducing this knowledge gap. The paper extends the builder’s model which was developed in Eurostat (2013)[11]. Characteristics which prove to be important in explaining condominium prices are: the floor space area of the unit, the total land area of the building, the number of units in the building, the total number of stories in the building, the height of the sold unit, the age of the structure and the amount of excess land. The paper also derives an estimate for the annual geometric structure depreciation rate for condominiums in Tokyo.

The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country and related price indexes for the land and structure components of a commercial property are required in the Balance Sheet accounts of the country for the calculation of the Multifactor Productivity of the Commercial Property Industry. The paper uses a variant of the builder’s model that has been used to construct Residential Property Price Indexes. Geometric depreciation rates are estimated for commercial offices in Tokyo using assessment data for REITs. The problems associated with the decomposition of asset value into land and structure components are addressed. The problems associated with depreciating capital expenditures on buildings and with measuring the loss of asset value due to early retirement of the structure are also addressed.

First version: 28th May, 2014, This version: 28th August, 2014, This paper aims to extend the existing evidence on the investment value of green buildings to international markets, specifically the residential market in Japan. Using a unique transaction database of condominiums in the Tokyo metropolitan area and a hedonic analytical framework, we find that green buildings command a small but significant premium on both the asking and transaction prices. This finding is consistent with results from other countries. As far as we are aware, this is also the first study of green buildings’ economic value based on a hedonic model incorporating buyer characteristics. However, further analysis reveals that this premium is primarily driven by wealthy households that exhibit a higher willingness-to-pay for eco-labelled condominiums, both as a total amount and as a fraction of the total sales price. We therefore conclude that eco-labels are perceived as a luxury good in the Japanese housing market rather than a way to save money on lower utility bills., 基盤研究(S) = Grants-in-Aid for Scientific Research (S)

We propose a semiparametric hedonic model of housing prices with nonlinearity in age and cohort effects. The model avoids the simultaneity problem among age, cohort and year effects, which is a common problem in linear hedonic models. Applying the model to housing prices in Tokyo between 1990 and 2008 revealed significant nonlinearities in both the age and cohort effects, and significant interactions between these effects, with the shape of the age effect differing across housing cohorts. Estimates of the year effect indicated a declining trend in prices that was more pronounced compared with those of conventional linear hedonic models.

Based on an analysis of the housing market, this study measures how Japanʼ s declining population and aging society influences its economic system in order to clarify empirically the effects of various policies to address these issues. Specifically, we simulate the decline in housing asset prices brought about by these population changes by 2040 and estimates the effects of three policies designed to suppress this decline: a) accepting more immigrants, b) raising the retirement age, and c) promoting the social advancement of women. The results obtained show that a) staving off the decline in asset prices would be impossible unless 40 million working-age immigrants were encouraged to migrate to Japan by 2040, that b) raising the retirement age to 70 or 75 would have a significant effect on maintaining residential price, and that c) promoting the social advancement of women would not have a significant effect despite incurring considerable social costs. We also extend our empirical model to a multinational-level data and show that some of the largest economies, such as China and Germany, would experience the aging of society in the next 30 years and those demographic changes will negatively impact on residential prices like Japan. This indicate that the findings of this study offer numerous suggestions not only for Japan but also for European and other Asian countries whose societies are expected to age at a greater rate in the future.

Since 2012, Eurostat requires the national statistical institutes (NSIs) in all European Union (EU) countries to compute official House Price Indices (HPIs) at a quarterly frequency. Eurostat recommends computing the HPI using a hedonic method. Most NSIs have followed this advice, although they differ in their choice of method. Some NSIs use stratified medians instead of hedonic methods. We evaluate the theoretical and empirical properties of both hedonic and stratified median methods. Of particular concern is the comparability of the HPIs across countries when computed using different methods. Our empirical comparisons use detailed micro-level data sets for Sydney and Tokyo, containing about 867,000 actual housing transactions. All the hedonic methods perform better than stratified medians. The hedonic methods generate quite similar results, except when applied to new dwellings in Tokyo. This finding shows that the choice of hedonic method can be important for smaller countries with less data. Also, the widely used hedonic repricing method becomes unreliable when the reference shadow prices are not updated frequently., Hill Robert J., Scholz Michael, Shimizu Chihiro, Steurer Miriam. An evaluation of the methods used by European countries to compute their official house price indices. In: Economie et Statistique / Economics and Statistics, n°500-502, 2018. Housing and housing markets. pp. 221-238.

Official Statistics on housing prices are a one of the relatively new segments of prices statistics, developed in the wake of the data gaps underlined by the last economic and financial crisis. Official European statistics need to abide to the highest standards of quality and harmonisation across countries. Eurostat and the National Statistical Institutes (NSIs) released the official harmonised HPIs in the beginning of 2013.Initially only indices on total housing price developments were published. However, users requested a breakdown into price developments for existing dwellings and for new ones. In parallel to further work on developing a methodological framework (with the Handbook on Residential Property Price Indices) and improvements of the data quality (starting from data sources for transactions, to data validation and index compilation) Eurostat worked with the NSIs on preparing the ground for this additional breakdown. Since autumn 2014 the split in new and existing dwellings has been made available both for annual and quarterly data. The quarterly data series start in 2005 and are disseminated with a timeliness of one quarter after the reference quarter.Today, HPI published by Eurostat are used for several policy purposes: for monetary policy assessments of price signals, for financial stability purposes as a soundness indicator and also to monitor macroeconomic imbalances: The deflated house price index (nominal HPI deflated by the index of private household consumption) is one of the fourteen MIP Scoreboard indicators used in the Alert Mechanism Reports.For complementing the information on price evolution and for supporting the analysis of housing markets, Eurostat started to work together with the NSIs to collect data on turnover. Furthermore, this was a request of the ECOFIN in order to further enrich the PEEIs (Principal European Economic Indicators). The publication of an index capturing the total value of transactions was launched in December 2015. The annual series are available for 18 EU Member States and going back to 2010. The publication of HPIs for EU countries going back often to 2000 together with the indices on turnover are a reliable source of data for better understanding the evolution of housing markets during the tumultuous period of the last decade and its implications for the present and future.

Gravity models excel at explaining international trade and investment flows; their success poses a continuing puzzle. In a comprehensive dataset of global commercial real-estate investments, we find that the role of distance in the gravity model is well-explained by preferential matching between counterparties of the same nationality. This tendency for same-country matching is widespread, robust, and increases in poorly-governed locations. We structurally estimate an equilibrium matching model with a friction affecting different-nationality transactions. The model explains the persistent success of gravity using a combination of this friction and the spatial distribution of same-nationality counterparties, which is well-predicted by current and historical linguistic, cultural, and trade links between countries.

The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country. Related service price indexes for the land and structure input components of a commercial property are required in the Production Accounts of the country if the Multifactor Productivity of the Commercial Property Industry is calculated as part of the System of National accounts. The paper reviews existing methods for constructing an overall Commercial Property Price Index (CPPI) and concludes that most methods are biased (due to their neglect of depreciation) and more importantly, not able to provide separate land and structure subindexes. A class of hedonic regression models that is not subject to these problems is discussed.

We propose a new method to estimate quality adjusted commercial property price indexes using real estate investment trust (REIT) data. Our method is based on the present value approach, but the way the denominator (i.e., the discount rate) and the numerator (i.e., cash flows from properties) are estimated differs from the traditional method. We run a hedonic regression to estimate the quality adjusted discount rate based on the share prices of REITs, which can be regarded as the stock market’s valuation of the set of properties owned by the REITs. As for the numerator, we use rental prices associated only with new rental contracts rather than those associated with all existing contracts. Using a dataset with prices and cash flows for about 400 commercial properties included in Japanese REITs for the period 2001 to 2013, we find that our price index signals turning points much earlier than an appraisal-based price index; specifically, our index peaks in the second quarter of 2007, while the appraisal-based price index exhibits a turnaround only in the third quarter of 2008. Our results suggest that the share prices of REITs provide useful information in constructing commercial property price indexes.

Summary The paper uses hedonic regression techniques in order to decompose the price of a house into land and structure components using real estate sales data for Tokyo. In order to get sensible results, a nonlinear regression model using data that covered multiple time periods was used. Collinearity between the amount of land and structure in each residential property leads to inaccurate estimates for the land and structure value of a property. This collinearity problem was solved by using exogenous information on the rate of growth of construction costs in Tokyo in order to get useful constant quality subindexes for the price of land and structures separately.

What kinds of policies should Japan adopt to address its declining population and aging society? Based on the housing market, this paper measures the impact that the countryʼs declining population and aging society will have on its economic system with the aim of empirically clarifying the effects of various policies. Specifically, it forecasts the decline in housing asset prices brought about by the declining population and aging society through 2040 and estimates the effects of three policies designed to suppress this decline or “asset meltdown”: a) accepting more immigrants, b) raising the retirement age, and c) promoting the social advancement of women. The results obtained show that promoting the social advancement of women will not have a significant effect despite involving considerable social costs, while in terms of immigration, it will not be possible to stave off the decline in asset prices unless 40 million working-age people are brought in by 2040. With regard to raising the retirement age, the results make clear that it would be necessary to increase it to 75. The findings of this paper offer numerous suggestions not only for Japan but also for European and Asian countries whose societies are expected to age further in the future.

In this paper, we investigate generation process of vacant housing. And we analyze that how real estate prices are affected by aging. We run regional panel regressions for Japan. Our regression results show that, in Japan, real estate prices in a region are inversely correlated with the old age dependency ratio, i.e. the ratio of population aged 65 +to population aged 20-64, in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan. Based on the regression result for Japan and the population forecast made by a government agency, we estimate the demographic impact on Japanese housing prices over the next 30 years. We find that it will be -2.4 percent per year in 2012-2040, suggesting that aging will continue to have downward pressure on land prices over the next 30 years. In addition to population decline and aging problem, we will also face aging problem of housing stock, especially for condominiums.

This study investigates the number of job opportunities collected from a Japanese job searching site (“fromA navi”) and an inter- national job searching site (“Indeed”). We confirm that a relationship between the number of job opportunities and socioeconomic quantities (the population, the numbers of firms and workers) in each 1-km grid square in Japan. The number of workers is the best explanatory variable to explain the number of job opportunities in Japan. The regression coefficients can be used as an indicator to grasp Japanese macroeconomic conditions. From a global point of view, we analyse the number of job opportunities in about 16,000 cities all over the world. We confirm the daily number of job opportunities in each city varies in time and show some asso- ciations with macroeconomic indicators. We compute a relationship between means of the daily number of job opportunities and their standard deviations and confirm that it follows a scaling relationship with power law exponent α = 1. A possible model based on Poisson processes with intensity of which varies in time on the basis of a common noise is proposed to explain the phenomenon empirically observed.

This study presents a review of the extant studies on Japanese green buildings and a new empirical analysis of the relation between office rent, green building labels, and actual energy use. We provide evidence as to what causes the positive association between green building labels and office rents. We first show that sustainability-related features of the building are effective in reducing the actual consumption of electricity and water. After controlling for the effect of these observed sustainability features, we find that green labels have separate effects on the reduction of the consumption of electricity and water. Thus, various green features required by green building labels are effective in saving energy and water usage. However, green labels do not have a direct effect on office rents once we control for the effect of electricity and water usage. Thus, tenants pay a rent premium to green buildings not for a brand associated with green building labels but for material benefits of green buildings regarding lower costs of energy and water.

Why was the Japanese consumer price index for rents so stable even during the period of housing bubble in the 1980s? In addressing this question, we start from the analysis of microeconomic rigidity and then investigate its implications about aggregate price dynamics. We find that ninety percent of the units in our dataset had no change in rents per year, indicating that rent stickiness is three times as high as in the US. We also find that the probability of rent adjustment depends little on the deviation of the actual rent from its target level, suggesting that rent adjustments are not state dependent but time dependent. These two results indicate that both intensive and extensive margins of rent adjustments are very small, thus yielding a slow response of the CPI to aggregate shocks. We show that the CPI inflation rate would have been higher by one percentage point during the bubble period and lower by more than one percentage point during the period of bubble bursting, if the Japanese housing rents were as flexible as in the US.

Purpose– The purpose of this article, starting from linear regression, was to estimate a switching regression model, nonparametric model and generalized additive model as a semi-parametric model, perform function estimation with multiple nonlinear estimation methods and conduct comparative analysis of their predictive accuracy. The theoretical importance of estimating hedonic functions using a nonlinear function form has been pointed out in ample previous research (e.g. Heckmanet al. (2010).Design/methodology/approach– The distinctive features of this study include not only our estimation of multiple nonlinear model function forms but also the method of verifying predictive accuracy. Using out-of-sample testing, we predicted and verified predictive accuracy by performing random sampling 500 times without replacement for 9,682 data items (the same number used in model estimation), based on data for the years before and after the year used for model estimation.Findings– As a result of estimating multiple models, we believe that when it comes to hedonic function estimation, nonlinear models are superior based on the strength of predictive accuracy viewed in statistical terms and on graphic comparisons. However, when we examined predictive accuracy using out-of-sample testing, we found that the predictive accuracy was inferior to linear models for all nonlinear models.Research limitations/implications– In terms of the reason why the predictive accuracy was inferior, it is possible that there was an overfitting in the function estimation. Because this research was conducted for a specific period of time, it needs to be developed by expanding it to multiple periods over which the market fluctuates dynamically and conducting further analysis.Practical implications– Many studies compare predictive accuracy by separating the estimation model and verification model using data at the same point in time. However, when attempting practical application for auto-appraisal systems and the like, it is necessary to estimate a model using past data and make predictions with respect to current transactions. It is possible to apply this study to auto-appraisal systems.Social implications– It is recognized that housing price fluctuations caused by the subprime crisis had a massive impact on the financial system. The findings of this study are expected to serve as a tool for measuring housing price fluctuation risks in the financial system.Originality/value– While the importance of nonlinear estimation when estimating hedonic functions has been pointed out in theoretical terms, there is a noticeable lag when it comes to testing based on actual data. Given this, we believe that our verification of nonlinear estimation’s validity using multiple nonlinear models is significant not just from an academic perspective – it may also have practical applications.

How exactly should one estimate property investment returns? Investors in property aim to maximize capital gains from price increases and income generated by the property. How are the returns on investment in property determined based on its characteristics, and what kind of market characteristics does it have? Focusing on the Tokyo commer-cial property market and residential property market, the purpose of this paper was to break down and measure the micro-structure of property investment returns in as much detail as possible. In Japan, the characteristics of property suitable for investment are dubbed “kin-shin-dai” (close, new, and large). That is, investors believe that invest-ment returns are high for properties that are very convenient in terms of transportation (close to the city center), new buildings (relatively new properties), and large-scale real estate (large design or floor space). Therefore, this paper first measured how the asset prices, income, and asset price-income ratios (discount rate) that comprise property in-vestment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Much of the information available on the property investment market is property price information determined by property appraisers. However, it is known that property appraisal prices are unable to appropriately reflect actual property market trends. Therefore, using enterprise value data for REIT investment management companies comprised of REIT investment unit prices (share prices) available on capital markets, this paper proposed a method of estimating property investment returns cor-responding to changes in capital markets, as well as clarifying the distortion in property investment returns that are formed based on property appraisal prices. Looking at the results obtained, for commercial property, as building floor space increased, it had the effect of raising both the income and price while lowering the discount rate. In par-ticular, compared to residential property, the results showed that a higher investment return can be obtained from commercial property by investing in larger-scale properties. Building age lowered the asset price and income for both commercial and residential property, but the effect was especially strong for residential property. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset markets and those formed by capital markets, and the results showed that a greater difference was generated while the market was shrinking. This finding suggests that looking at property investment returns that are estimated based on asset market information alone could lead to erroneous investment decisions.

In the formulation of hedonic models, in addition to locational factors and building structures which affect the house prices, the generation of the omitted variable bias is thought to occur in cases when local environmental variables and the individual characteristics of house buyers are not taken into consideration. However, since it is difficult to obtain local environmental information in a small neighborhood unit and to observe individual characteristics of house buyers, these variables have not been sufficiently considered in previous studies. We demonstrated that non-negligible levels of omitted variable bias are generated if these variables are not considered.

Despite an increasing interest in issues surrounding environmental equity, much research evidence to date is based on studies adopting cross-sectional approaches which do not adequately capture the processes and mechanisms generating inequities. Longitudinal studies may better inform policy measures to remedy inequity between populations, but the few that have been undertaken have mostly been focused solely on environmental risks—ignoring access to amenities. As a case study, we adopt a longitudinal approach in this work to investigate the association between sociodemographic indicators and public park provision over an eighteen-year period in the city of Yokohama, Japan. We show that inequities in park provision are present over the whole time period. Hedonic modelling shows that park accessibility is positively associated with house and land prices in the city. Our results suggested some, relatively weak, evidence of two causal processes: new parks are located in more affluent communities; yet new parks also appear to encourage further move-in of affluent populations. We suggest that park provision by administrative authorities in less-affluent neighbourhoods may be required to maintain equity in access to these valuable community resources. Economic incentives, such as subsidy provision, may have a role to play to encourage park provision by developers. Keywords: environmental equity, longitudinal study, park accessibility, Japan

As interest grows in environmentally friendly buildings, or “green buildings,” the real estate industry is expected to play an increasingly active role in the realization of a low-carbon society. Various efforts toward such a society are currently being promoted vigorously within an international framework. To supply a socially desirable level of green buildings via the market mechanism, the economic value of green buildings (as measured by the market) must be commensurate with the required investment. Many remain sceptical, however, about the true economic value of green buildings. A thorough analysis has yet to be conducted to evaluate whether green buildings realize income increases commensurate with the enormous initial investments required, although it is clear that cost savings do result from lower energy consumption. This paper shows through a series of analyses that certain market conditions must be in place in order for green buildings to produce economic value. Specifically, it used the hedonic approach to clarify whether or not there is added economic value, focusing on the new condominium market in the Tokyo metropolitan area. Based on a demonstration analysis of the housing market, the author shows that new condominiums with “green labels” using “sustainable measures” command a premium of approximately 5.8% in asking prices and 4.7% in transaction prices.

While fluctuations in commercial property prices have an enormous impact on economic systems, the development of related statistics that can capture these fluctuations is one of the areas that is lagging the furthest behind. The reasons for this are that, in comparison to housing, commercial property has a high level of heterogeneity and there are extremely significant data limitations. Focusing on the Tokyo office market, this study estimated commercial property price indexes using the data available in the property market, and clarified discrepancies in commercial property price indexes based on differences in the method used to create them. Specifically, we estimated a quality-adjusted price index with the hedonic price method using property appraisal prices and transaction prices available for the JREIT market. In addition, we attempted to estimate a price index based on a present value model using revenues arising from property and discount rates. Here, along with the discount rates underlying the determination of property appraisal prices and transaction prices, we obtained discount rates using enterprise values that can be acquired from the J-REIT investment market, and estimated the respective risk premiums. First, the findings showed that, compared to risk premiums formed by the stock market, risk premiums when determining property appraisal prices change only relatively gradually, with the adjustment speed being especially slow while the market is contracting. As a result, these prices decline only slowly. They also showed that until the Lehman Shock, property market risk premiums formed by the stock market were at a lower level than risk premiums set when determining property appraisal prices and transaction prices, but following the Lehman Shock, the respective risk premiums converged toward the same level.

Following the collapse of the economic bubble in 1991, Japan’s economic growth has slowed down. In particular, with respect to the office market, it has suffered high vacancy rates and there have been many cases where office buildings have had to be rebuilt. This trend is predicted to further increase in the midst of a precipitous decline in the size of the working-age population. When undertaking an office investment under such circumstances, it will be essential to select an investment property and the area (in which such property is located) carefully. The purposes of this paper were to extract the signals used to determine the market selection with respect to an office investment, and to make apparent areas that will, going forward, continue to maintain strong fundamentals (potential value) in the office investment market. In regards to area selection, this paper focused on the phenomenon where, following the collapse of the economic bubble, many office buildings had to be put to different uses out of necessity.This paper also focused on the changes in real estate investment returns and building use by area. Specifically, factors affecting changes in building use were extracted by applying a panel random probit model on the 3,134 areas surveyed under the national census from 1991, when the collapse of the real estate bubble began and onward. Further, based on the factors that were extracted per the above, areas that have strong survival rates as office markets were selected. As a result of estimating the panel random probit model, which focused on the changes in building use, it has been found that the conversion from office use to residential use has been largely brought about by the index which measures the extent of excess in rents when a building is converted to residential use as opposed to using it as an office building. This finding conformed to the result that was indicated in a series of analyses that began with Wheaton (1982) as follows: “return differentials effect land use conversions.” Moreover, 303 areas predicted to have strong fundamentals for office investments have been extracted using the ratio of office rents to residential rents. These analyses have been conducted with respect to Tokyo, which is a region that has extremely weak land use regulations. As such, there are limitations to applying these analyses to cities that have stricter land use regulations that make it difficult to commence construction or rebuild in such cities. Nonetheless, as analyses of the Tokyo office market, where population decline and aging are progressing at the fastest rate, are being conducted ahead of other major developed countries, it is thought that such analyses will serve as an important guide for many cities, starting with European cities, that will be facing similar situations going forward.

While fluctuations in commercial property prices have an enormous impact on economic systems, the development of related statistics that can capture these fluctuations is one of the areas that is lagging the furthest behind. The reasons for this are that, in comparison to housing, commercial property has a high level of heterogeneity and there are extremely significant data limitations. Focusing on the Tokyo office market, this study estimated commercial property price indexes using the data available in the property market, and clarified discrepancies in commercial property price indexes based on differences in the method used to create them. Specifically, we estimated a quality-adjusted price index with the hedonic price method using property appraisal prices and transaction prices available for the J-REIT market. In addition, we attempted to estimate a price index based on a present value model using revenues arising from property and discount rates. Here, along with the discount rates underlying the determination of property appraisal prices and transaction prices, we obtained discount rates using enterprise values that can be acquired from the J-REIT investment market, and estimated the respective risk premiums. First, the findings showed that, compared to risk premiums formed by the stock market, risk premiums when determining property appraisal prices change only relatively gradually, with the adjustment speed being especially slow while the market is contracting. As a result, these prices decline only slowly. They also showed that until the Lehman Shock, property market risk premiums formed by the stock market were at a lower level than risk premiums set when determining property appraisal prices and transaction prices, but following the Lehman Shock, the respective risk premiums converged toward the same level.

Dramatic increases and decreases in housing prices have had an enormous impact on the economies of various countries. If this kind of fluctuation in housing prices is linked to fluctuations in the consumer price index (CPI) and GDP, it may be reflected in fiscal and monetary policies. However, during the 1980s housing bubble in Japan and the later U.S. housing bubble, fluctuations in asset prices were not sufficiently reflected in price statistics and the like. The estimation of imputed rent for owneroccupied housing is said to be one of the most important factors for this. Using multiple previously proposed methods, this study estimated the imputed rent for owner-occupied housing in Tokyo and clarified the extent to which the estimated imputed rent diverged depending on the estimation method. Examining the results obtained showed that, during the bubble’s peak, there was an 11-fold discrepancy between the Equivalent Rent Approach currently employed in Japan and Equivalent Rent calculated with a hedonic approach using market rent. Meanwhile, with the User Cost Approach, during the bubble period when asset prices rose significantly, the values became negative with some estimation methods. Accordingly, we estimated Diewert’s OOH Index, which was proposed by Diewert and Nakamura (2009). When the Diewert’s OOH Index results estimated here were compared to Equivalent Rent Approach estimation results modified with the hedonic approach using market rent, it revealed that from 1990 to 2009, the Diewert’s OOH Index results were on average 1.7 times greater than the Equivalent Rent Approach results, with a maximum 3-fold difference. These findings suggest that even when the Equivalent Rent Approach is improved, significant discrepancies remain.

This paper seeks to investigate the nature and magnitude of the distortion in appraisal land price information according to change in the market, with a special focus on the Government’s Published Land Prices. In Japan, there is an item of land price information, the so-called Koji-Chika (PLPS: Published Land Price Information System), that is a survey of fair market value by qualified appraisers. The valuation error of this land price information was analyzed using the following method. First, hedonic price indexes were constructed based on both actual transaction prices and the Published Land Prices, they were then compared to detect possible distortions in the governmental price information. The possibility of structural change in the Japanese real estate markets was also studied and its effect on price indexes was considered. Analysis of the Tokyo metropolitan area took place between 1975 and 1999. Large and systematic discrepancies between actual transaction prices and the Published Land Prices were identified, which might suggest that there are serious problems with the governmental information system. It is believed that it is necessary to consider this issue in the context of the entire real estate appraisal system in Japan.

Urban capital improvement projects in local governments have recently faced adjustment problem of cost sharing as well as strict requirement of accountability for the way of using public money. The inter-governmental aid, which had supported local capital improvement projects, has been cut severely. And, historically, the most striking feature of the exaction policy in Japan is its reliance on regulatory power to generate revenue for public purpose. Under this severe financial situation, these projects need more efficient and rational decision-making system for benefit distribution among related parties. The purpose of this paper is twofold. First, it reviews historical background and current situation of financial system of the urban capital improvement projects. Second, we show a desirable financial system that is free from friction with local residents. For these purposes, we start with an analysis of historical and legal aspect of the impact fee system. Next, focusing on sewer impact fee, we reveal an implicit mechanism working as an special assessment.

The purposes of this paper were to extract the signals used to determine the market selection with respect to an office investment, and to make apparent areas that will, going forward, continue to maintain strong fundamentals (potential value) in the office investment market. In regards to area selection, this paper focused on the phenomenon where, following the collapse of the economic bubble, many office buildings had to be put to different uses out of necessity. This paper also focused on the changes in real estate investment returns and building use by area. Specifically, factors affecting changes in building use were extracted by applying a panel random probit model on the 3,134 areas surveyed under the national census from 1991, when the collapse of the real estate bubble began and onward. Further, based on the factors that were extracted per the above, areas that have strong survival rates as office markets were selected. As a result of estimating the panel random probit model, which focused on the changes in building use, it has been found that the conversion from office use to residential use has been largely brought about by the index which measures the extent of excess in rents when a building is converted to residential use as opposed to using it as an office building. This finding conformed to the result that was indicated in a series of analyses that began with Wheaton ( 1982 ) as follows: return differentials effect land use conversions. Moreover, 303 areas predicted to have strong fundamentals for office investments have been extracted using the ratio of office rents to residential rents.

Summary Do indexes of house prices behave differently depending on the estimation method? If so, to what extent? To address these questions, we use a unique dataset that we compiled from individual listings in a widely circulated real estate advertisement magazine. The dataset contains more than 470,000 listings of housing prices between 1986 and 2008, including the period of the housing bubble and its burst.We find that there exists a substantial discrepancy in terms of turning points between hedonic and repeat sales indexes, even though the hedonic index is adjusted for structural changes and the repeat sales index is adjusted in the way Case and Shiller suggested. Specifically, the repeat sales measure signals turning points later than the hedonic measure: for example, the hedonic measure of condominium prices bottomed out at the beginning of 2002, while the corresponding repeat sales measure exhibits a reversal only in the spring of 2004. This discrepancy cannot be fully removed even if we adjust the repeat sales index for depreciation.

PurposeAn economic indicator faces two requirements. It should be reported in a timely manner and should not be significantly altered afterward to avoid erroneous messages. At the same time, it should reflect changing market conditions constantly and appropriately. These requirements are particularly challenging for housing price indices, since housing markets are subject to large temporal/seasonal changes and occasional structural changes. The purpose of this paper is to estimate a hedonic price index of condominiums of Tokyo, taking account of seasonal sample selection biases and structural changes in a way it enables us to report the index in a manner which is timely and not subject to change after reporting.Design/methodology/approachThe paper proposes an overlapping‐period hedonic model (OPHM), in which a hedonic price index is calculated every month based on data in the “window” of a year ending this month (this month and previous 11 months). It also estimates standard hedonic housing price indexes under alternative assumptions: no structural change (“structurally restricted”: restricted hedonic model) and different structure for every month (“structurally unrestricted”: unrestricted hedonic model).FindingsResults suggest that the structure of the housing market, including seasonality, changes over time, and these changes occur continuously over time. It is also demonstrated that structurally restricted indices that do not account for structural changes involve a large time lag compared with indices that do account for structural changes during periods with significant price fluctuations.Social implicationsFollowing the financial crisis triggered by the US housing market, housing price index guidelines are currently being developed, with the United Nations, International Monetary Fund, and Organization for Economic Co‐operation and Development leading the way. These guidelines recommend that indices be estimated based on the hedonic method. We believe that the hedonic method proposed here will serve as a reference for countries that develop hedonic method‐based housing price indices in future.Originality/valueIn the many studies involving conventional housing price indices, whether those using the repeat‐sales method or hedonic method, there are few that have analyzed the problem of market structural changes. This paper is the first to construct a large database and systematically estimate the effect that changes in market structure have on housing price indices.

PurposeWhen Japan's asset bubble burst, the office vacancy rate soared sharply. This study seeks to target the office market in Tokyo's 23 special wards during Japan's bubble burst period. It aims to define economic conditions for the redevelopment/conversion of offices into housing and estimate the redevelopment/conversion probability under the conditions.Design/methodology/approachThe precondition for land‐use conversion is that subsequent profit excluding destruction and reconstruction costs is estimated to increase from the present level for existing buildings. Regarding hedonic functions for offices and housing and computed profit gaps for approximately 40,000 buildings used for offices in 1991, it was projected how the profit gaps would influence the land‐use conversion probability. Specifically, panel data for two time points in the 1990s were used to examine the significance of redevelopment/conversion conditions.FindingsIt was found that, if random effects are used to control for individual characteristics of buildings, the redevelopment probability rises significantly when profit from land after redevelopment is expected to exceed that from present land uses. This increase is larger in the central part of a city.Research limitations/implicationsLimitations stem from the nature of Japanese data limited to the conversion of offices into housing. In the future, a model may be developed to generalize land‐use conversion conditions.Originality/valueThis is the first study to specify the process of land‐use adjustments that emerged during the bubble burst. This is also the first empirical study using panel data to analyze conditions for redevelopment.

As interest grows in environmentally friendly buildings, or “green buildings,” the real estate industry is expected to play an increasingly active role in the realization of a low-carbon society. Various efforts toward such society are now being promoted vigorously within an international framework.To supply a socially desirable level of green building via the market mechanism, the economic value of green buildings (as measured by the marketplace) must be commensurate with the required investment. Many remain skeptical, however, about the true economic value of green buildings. A thorough analysis has yet to be conducted to evaluate whether green buildings realize income increases commensurate with the enormous initial investments required, although it is clear that cost savings do result from lower energy consumption. The issue becomes even more complex when we consider whether net income increases over short and medium-to-long investment periods, given that future repair costs are proportional to the initial investment. Another question is how these buildings will be valued in the market once they are offered for sale.This paper shows, through a series of analyses, that in order for green buildings to produce economic value, accurate information about the buildings must be disseminated throughout the marketplace, market participants’ behavior must be transformed by such information, and public regulations must be in place to effect this behavioral transformation. Based on a demonstration analysis of the housing market, the author shows that new condominiums with “green” labels command a premium of approximately 5 percent. Through these analyses, the author suggests that in the real estate investment market, the longer the investment period, the more important it is to plan for environmental risks.

The performance of the BD Phoenix SMIC/ID8 Streptococcus Panel (BDSP) for identification (ID) and susceptibility testing of Streptococcus pneumoniae (S. pneumoniae) was compared to the Clinical and Laboratory Standards Institute (CSLI) method. Mutations of penicillinbinding protein (PBP) genes were detected by polymerase chain reaction (PCR), and the minimum inhibitory concentrations (MIC) values obtained from BDSP were compared with the PCR results. To identify bacterial isolates, the concordance rate to those with autolysin gene was 97.1%. The MIC50 and MIC90 with the BDSP and CLSI method were in close agreement in non-mutants and single PBP mutants. However, when the number of PBP mutations increased, MICs increased further and demonstrated resistance to penicillin (PEN) in particular. Thereby, MICs by BDSP were higher than those by the CLSI method (P

Background Intradialytic hypotension (IDH) is a common clinical trait in hemodialysis (HD) which is caused by poor biocompatibility of the dialyzer membrane. Aiming to improve IDH, vitamin E-bonded polysulfone dialyzer (VPS-H) was evaluated in a pilot study. Methods Eight IDH patients on standard HD were switched from their conventional high-flux dialyzers to VPS-H, and intradialytic blood pressure (BP) was monitored regularly for 10 months. Results The results showed that hypotension of systolic BP (SBP), diastolic BP (DBP) and pulse pressure (PP) during the session were improved after changing the dialyzer. Notably, almost all the values recorded from 120 minutes into the session until the end of the treatment in the period between the second and tenth month after treatment were significantly different from the corresponding baseline values. Moreover, after 8 to 10 months, the SBP prior to a dialysis session was significantly reduced compared with baseline values. On the other hand, the pulse rate showed no difference throughout the study period. Conclusions This study provides early evidence of the beneficial role that vitamin E-bonded dialyzers may have in preventing IDH. Larger controlled trials are needed to confirm this original finding.

An economic indicator faces two requirements. It should be timely reported and should not significantly be altered afterward to avoid erroneous messages. At the same time they should reflect changing market conditions constantly and appropriately. These requirements are particularly challenging for housing price indices, since housing markets are subject to large temporal/seasonal changes and occasional structural changes. In this study we estimate a hedonic price index of previously-owned condominiums of Tokyo 23 Wards from 1986 through 2006, taking account of seasonal sample selection biases and structural changes in a way it enables us to report the indexes timely which are not subject to change after reporting. Specifically, we propose an overlapping-period hedonic model (OPHM), in which a hedonic price index is calculated every month based on data in the “window” of a year ending this month (this month and previous eleven months). We also estimate hedonic housing price indexes under alternative assumptions: (i) no structural change (“structurally restricted”) and (ii) different structure for every moth (“structurally unrestricted”). Results suggest that the structure of the housing market, including seasonality, changes over time, and these changes occur continuously over time. It is also demonstrated that structurally restricted indices that do not account for structural changes involve a large time lag compared with indices that do account for structural changes during periods with significant price fluctuations.

Japan and the United States have experienced the housing bubbles and subsequent collapses of the bubbles in succession. In this paper, these two bubbles are compared and the following findings are obtained. Firstly, upon applying twenty years of past data from Japan to the "repeat-sales method" and the "hedonic pricing method", which are representative methods for calculating house prices, it was found that the timing at which prices bottomed out after the collapses of the bubbles differed depending on the two methods. The timing for bottoming out as estimated by the repeat-sales method delayed when compared to the estimate using the hedonic pricing method, by 13 months for condominiums and by three months for single-family homes. This delay is caused by the depreciation effect of building not being processed appropriately by the repeat-sales method. In the United States, the S&P/Case-Shiller Home Price Indices are representative house prices indices, which use the repeat-sales method. Therefore, it is possible that the timing for bottoming out is estimated to be delayed. As there are increasing interests in the timing for bottoming out of the US housing market, there is a risk that the existence of such a lag in cognition causes the increase of uncertainty and the delay in economic recovery. Secondly, when looking at the relationship between the demand for houses and house prices based on the time-series data, there is a positive correlation between the two elements. However, upon conducting an analysis using the panel data, which is based on data in units of prefectures or states, there is no significant relationship between the demand for houses and house prices in both Japan and the United States. In this sense, it is hard to explain whether there is a bubble and the size of the bubble according to prefecture (state) using demand elements. This suggests that it is possible that the concept of demographics having an impact on the demand for houses, which thus caused the house prices to increase, is not effective in explaining the price fluctuations in neither Japan nor the United States. Thirdly, when looking at the co-movement between the house prices and rent, a phenomenon which the rent almost does not fluctuate at all even when the significant change of house prices change in the process of the formation and collapse of a bubble was confirmed for both Japan and the United States. Its background is that landlords and tenants have formed long-term contractual relationships so that both parties can save on various transactional costs. In addition, the imputed rent of one's home is not assessed using market prices in Japan, which is an aspect to weaken the co-movement. A lack of co-movement causes a phenomenon in Japan and the United States where consumer prices that include this rent as an important element do not increase since rent does not increase even if housing prices increase during a bubble period. Thus, it results in a delay towards a shift to tighten credits. Since rent prices do not move together with the house prices even after house prices decrease after the collapse of the bubble, a phenomenon which consumer prices do not decrease was observed. This served as a factor for the delay in a shift towards monetary relaxation. Rent prices are an important variable that serves as a node between asset prices and prices of goods and services. It is necessary to increase the accuracy with which it is measured. Key Words: Housing Bubble, House Price Index, House Demand, Rent Rigidity

The turmoil in the international financial market since the subprime loan crisis has had a significant effect on the real-estate investment market in Japan, particularly the Japan real-estate investment trust (J-REIT) market. This suggests that the real-estate investment market is becoming part of the financial market. It is necessary to precisely understand the mechanism of risk generation and cash flow in the real-estate market to understand the characteristics of the real-estate investment market.The purpose of this study is to statistically clarify the characteristics of the five problems that have been recently pointed out as risk factors in the real-estate investment market for housing. Specifically, we have attempted to clarify the following five intrinsic problems, which are considered to be characteristics of the housing market: 1) the return problem, 2) the small-scale investment problem, 3) the risk associated with the adjustment of rent, 4) the key tenant problem, and 5) the inflation problem, all of which have been pointed out to be problems in the housing and retail markets.Regarding the risk associated with the adjustment of rent, we investigated the actual situation in the housing market by considering the decrease in housing rent with the age of the building and the adjustment of housing rent when a new contract is concluded between a landlord and a new tenant. The results indicated that the yearly rate of decrease in housing rent for nontimbered houses is as high as approximately 6% over the first five years after construction, but decreases to 2.6% over the 5th to 10th years and 2.5% over the 10th to 20th years, indicating that the long-term rate of decrease in housing rent is small. The probability of no change in rent was converted to a yearly value of 0.6585, which means that the revenue from the housing rent of 65% of leasehold properties does not change. This result revealed that housing rent in the Japanese market is extremely sticky compared with that in the US. Regarding the risk associated with the adjustment of rent, the probability of downward adjustment of the housing rent should be considered; however, in most cases, the housing rent is left unchanged. Even when the housing rent is adjusted downward, decreases of more than 10% comprised only 11.2% of all the adjustments. Also note that the occurrence of rent adjustment is random with respect to time; the housing rent market is not strongly affected by the economic environment, in contrast to the market for office buildings; a turnover of residents occurs because of events such as marriage, childbirth, and relocation, regardless of the economic cycle, causing the housing rent to change.

Extended-spectrum beta-lactamase (ESBL)-producing bacteria are known to be resistant to penicillins, cephalosporins, and monobactams because of their substrate specificity, and these bacteria are sensitive only to a narrow range of antimicrobial agents. The present study was undertaken to evaluate the efficacy of carbapenems and the new quinolones against ESBL-producing Escherichia coli, using a Monte Carlo simulation based on the pharmacokinetic/pharmacodynamic (PK/PD) theory. The time above MIC (TAM, %) served as the PK/PD parameter for carbapenems, with the target level set at 40%. The AUC/MIC served as the PK/PD parameter for the new quinolones, with the target level set at more than 125. In the analysis of drug sensitivity, the MIC50 of all carbapenems other than imipenem was low (0.03 microg/ml), while the MIC50 of the new quinolones was higher (1-2 microg/ml). The probability of achieving the PK/PD target with carba penems after two doses at the usual dose level, as determined by the Monte Carlo simulation, was high for each of the carbapenems tested (99.0% for biapenem, 99.60% for meropenem, and 95.03% for doripenem), except for imipenem. Among the new quinolones, the highest probability of achieving the PK/PD target was obtained with pazufloxacin (42.90%). Thus, the results of the present study have revealed that carbapenems are effective at the regular dose and can be used as the first-choice antibiotics for ESBL-producing E. coli because the resistance ratios for carbapenems are low compared to those of the new quinolones.

The purpose of this study is to estimate the hedonic price index of secondhand condominiums while taking into account seasonal sample selection bias and structural changes, using the 23 wards of Tokyo as a subject. When housing price indices are estimated using a hedonic price model, the problem of temporal sample selection bias in addition to changes in the housing market structure should be considered. We propose an overlapping-period hedonic model (OPHM: this model was proposed by Ono, et al first), which can accommodate seasonal sample selection bias and structural changes. In addition, we estimate housing price indices for the 23 wards of Tokyo from 1986 through 2006, and demonstrate biases in price indices because of differences in the functions used in the models. Results of the estimation using the OPHM demonstrate that the structure of the housing market changes with time, and these changes occur continuously with time. It is also demonstrated that structurally restricted indices that do not account for structural changes involve a large time lag compared with indices that do account for structural changes during periods with significant price fluctuations. This study proposes a method of estimating hedonic housing price indices under the conditions of successively added data and structural changes.

In this paper, we estimate hedonic price equations of Japanese commercial and residential land prices for a 25-year period and to investigate possible structural changes in these price equations. Our price equations are based on transaction prices, not appraised land values, of commercial land in Central Business Districts of Tokyo (Chiyoda Ward, Chuo Ward, and Minato Ward), and residential land of its suburb (Setagaya Ward). We find that price structure differs substantially among locations, reflecting differences in supplier pricing and end-user preferences. We also find significant structural changes in price structure, identifying pre-bubble, bubble and post-bubble periods.