The Spatial Growth of Tokyo Metropolitan Area

The author examines the optimality of the equilibrium development pattern of the Tokyo metropolitan region. He concludes that the metropolitan region of Tokyo is growing in a non-optimal way, primarily as a consequence of "tulipmania expectations" in the land market. He advocates a strong land taxation policy correcting the prices of land into a pattern reflecting real values of different land areas in the region. The major advantage of such a land taxation scheme would be increasing intensity of land use at commuting distances of 40 to 70 minutes from the CBD. This would decrease the current intensive housing construction in the extremely distant suburbs, thus reducing the growth of average commuting time in the region