| Abstract | In Korea, the chronic sl<.yrocketing of urban land price during· the last three decades has been observed and has eng·endered serious social problems. The government's basic response to stabilize the urban land price, in particular, urban residential land price, was the implementation of rigorous anti- speculation policy measures especially in the latter half of the 1980s. However, these interventions were affected without a comprehensive and careful review of the underlying causes of urban residential land price increase. The outcome of such policy interventions may do more harm than good. Therefore, empirical studies on the underlying factors affecting urban residential land price are required to prevent unintended adverse effects which, in turn, would help to set the limits of government interventions and to identify proper policy measures. This empirical study has been conducted to meet such crucial needs. Using qualitative and quantitative method, the study focuses on the analysis of urban residential land price of 61 cities. The analysis are based on both demand and supply factors as well as government policy measures. To draw out more concrete policy directions, causal and consequent relationships between the trends of residential land price and macro-variables were analyzed using the Granger Causality Test technique . Macro-level determinants of urban residential land price were analyzed based on the portfolio balance concept. The analysis found that, at the national level, money supply is the most significant factor determining· urban residential land price. On the other hand, the determinants of urban residential land price variations across 61 cities were analyzed through multiple regTession technique using· the assumption of inter- city equilibrium of life quality concept. On the basis of this analysis, the study identified the most significant factors affecting urban residential land price to include: population size, population density, local economic situation measured by local tax amount per resident and location quotient of the service sector, amenities, and current and future residential land supply. Furthermore, the study found the existence of bubble in Korean land price, which may justify government interventions to moderate the increase of urban residential land price for the purpose of equity as well as efficiency. Also, a model of the dynamics of urban residential land price is developed, which can be applied to determine the direction and limitation of government intervention on urban land market. Based on this model and the results of the analysis on urban residential land price determinants mentioned above, implicit as well as explicit urban land policy implications and recommendations are suggested, in particular to reduce bubble in urban residential land price. Lastly, recommendations for further studies are suggested to develop more comprehensive bubble model and inter- city land price variation model. |