Open AccessTIME IS OF THE ESSENCE? AN EMPIRICAL APPLICATION OF THE COROLLARY OF THE COASE THEOREM
Author(s) -
Lai Lawrence W.C.,
Wong S.K.,
Ho Eric C.K.,
Chau K.W.
Publication year - 2008
Publication title -
review of urban & regional development studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.184
H-Index - 21
eISSN - 1467-940X
pISSN - 0917-0553
DOI - 10.1111/j.1467-940x.2008.00134.x
Subject(s) - coase theorem , corollary , transaction cost , property rights , economics , property (philosophy) , database transaction , proposition , limit (mathematics) , microeconomics , time limit , econometrics , mathematical economics , mathematics , computer science , mathematical analysis , philosophy , management , epistemology , pure mathematics , programming language
Applying the corollary of the Coase Theorem to the development market developed in Lai et al. (2007a), we evaluate the proposition that procedural steps to use resources are not contingent on property rights assignment, unless the associated transaction costs are positive or property rights are ambiguous. Using aggregate statistics regarding planning applications for residential use, property prices, construction costs, share prices, interest rates, and application success rates in Hong Kong from 1985 to 2005, we evaluated, using regression techniques, the null hypothesis that there was no change in the relationship between readiness for submission of planning applications and property prices in response to changes in the time limits imposed on planning permissions . The relationship was more pronounced or strengthened (less obvious or weakened) when time limits were first imposed and shorter (longer). This can be explained in terms of the transaction costs of switching resource allocation according to the time limit.