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Land Price Data and Land Value Functions in Cracow, Poland

David Dale-Johnson and W. Jan Brzeski

May 2001, English

The results of the analysis reported in this paper provide new insight into the evolution of an urban land market in a centrally planned economy undergoing transformation. Since the end of the Second World War, land use in Poland has been determined administratively. From early 1993 to late 1999 prices have been driven by market conditions in an economy undergoing transformation and influenced by anticipated land uses. This study reports the legislative, economic and political evolution during this time frame, describes the database developed to explore the evolution of the land market, and the results of an initial analysis of that data. The database permits the estimation of land price indexes by type of land use and land price gradients for different types of land uses and for different time periods from 1993 to 1999. Plots of price indexes, two-dimensional plots of univariate land price gradients and three-dimensional plots of estimated land price functions are among the figures presented in order to provide insight into the data set.

The key results of this initial study are:

    • the fit of the estimated land value function declines as time passes, and
    • in most cases the slope of the land value function becomes steeper as time passes.

The former result is consistent with previous studies over a much longer time frame in New York and Chicago while the latter is not. To understand these results it is necessary to revisit the assumptions that underlay models of land prices and rethink these in the context of a transforming economy. That is our agenda for further research.


Economic Development, Land Reform, Land Value