Causality in Real Estate Economics

This lecture explores the relationship between land prices and real estate prices, emphasizing the indirect link through project selection. It discusses scenarios where higher land prices impact project feasibility and the strategies developers can employ. The lecture also delves into the influence of land prices on real estate prices, highlighting that land prices are often determined by real estate prices. Through case studies and illustrations, the instructor illustrates how changes in land prices can affect project viability and pricing decisions. The conclusion emphasizes the indirect causal relationship between land prices and real estate prices, leading to an increase in average land and real estate prices. The lecture concludes by hinting at the need for a deeper understanding of how land prices are formed based on developers' willingness to pay.