Somkiat Tangkitvanich: This paper by Tama, Shimizu, and Nishimura addresses the important issue of the impacts of aging population on land prices in Japan. The issue is important not only for Japan, but also for Korea, Thailand, China, and other countries whose populations are rapidly aging.

The paper begins by providing motivations to the issues to be addressed, discusses the theory of long-run portfolio choice, and explains the analytical model. After that, it simulates the impacts of aging societies on land prices in each municipality in Japan by using the model and the data gathered by the National Institute for Population and Social Security Research (IPSS).

The simulation results predict that the average residential land price in the Japanese municipalities would face a whopping decrease—as much as 19 percent from the present to 2020 and 32 percent to 2040. Moreover, there will be a significant variation among municipalities. For example,...

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