This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Hong, Y.-H. Search for Related Content Social Bookmarking                   What's this?

Transaction Costs of Allocating Increased Land Value Under Public Leasehold Systems: Hong Kong

Division of Social Science, Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong, soyhhong{at}usthk.ust.hk.

Using Hong Kong as a case study, the paper explores the viability of four land-value-capture mechanisms available under public leasehold systems: initial land auctioning; contract modification; lease renewal; and, the collection of land rent. It is found that these mechanisms do not work equally well; instead, their viability depends largely on the context within which the contracting parties practise land leasing. By applying a modified transaction-costs framework to the case, it is shown that the transaction costs of allocating the land value at the initial land auction are the lowest among the four mechanisms. This explains why the Hong Kong government relies on public land auctions to capture land value. The paper concludes with a discussion of the implications of this finding for Hong Kong and for countries where officials are experimenting with public leasehold systems.

CiteULike    Connotea    Del.icio.us    Digg    Reddit    Technorati    What's this?