"Distortion in Land Price Information---Mechanism in Sales Comparables and Appraisal Value Relation---"

This paper investigates the nature and magnitude of distortion in land price information publicly available in Japan, especially in the Published Land Price of the Japanese Government. After examining characteristics of various land price information in Japan, we construct hedonic price indexes based on both actual transaction prices and Published Land Prices, and compare them to find possible distortion in the governmental price information. We find a large and systematic discrepancy between actual transaction prices and Published Land Prices, suggesting serious problems in the governmental information system. We also consider possibility of structural change in the Japanese real estate markets, and examine its effect on price indexes.