Parcel Size,Degree Of Competition And Their Impact On Unit Land Price

Since the tax system reforming1994, local government’s financial pressure is increasing. In the dual benefits and incentives for promotion, local governments began to explore the path to increase budget revenues. Moreover, China’s land system provides opportunities just for the local government to increase budget revenues, which operates through the land to make up the financial shortfall for developing the city. As for the revenue and expenditure of Hangzhou, we can see the land premium is an important part of their local finances, so the government has a strong incentive to make the land transferring revenue maximization. However, the local government’s land supply has some constraints, in this case, the local government maximize the unit land price in order to achieve the target of total land revenue maximization. So whether the local governments sell land by adjusting the size of the parcel to influence the degree of market competition, thereby affecting the final sale price of the land, in order to achieve the goal of maximizing land revenue?Based on learning from the past research scholars, this paper expand the relevant theoretical and empirical deduction from the microscopic perspective that the land parcel size can affect the market competition, thereby affect the price of land transactions. This study not only has practical significance in explaining the behavior of local government land supply, but also has theoretical implications for the microscopic study of the impact mechanism of expanding land prices.In view of this, this paper reviews and sorts the relevant theoretical and empirical research, based on theoretical analysis and specification analysis, construct function model about land transaction prices, and develop empirical analysis by using transferring data of residential land (including residential and commercial land) of Hangzhou2007-2012, to test the impact of parcel of land on the transaction price in the area. And also, this research explored the impact mechanisms between the two by introducting the intermediary effects model.The empirical results showed that parcel area has significant impact on the turnover of the floor price, and the impact is negative. That is to say, the bigger the single residential land parcels of area, the lower the turnover of the floor price. In the mediating effect model, respectively, we put the land bidder numbers and auction rounds as two mediating variables into the mediating effect equations and test their significance, the test results showed that mediating effect is remarkable when the bidder numbers be treated as a mediating variable, and is not fully mediated effects. This result suggests that the impact of parcel area on the the floor price were only part of by mediating variables-the number of bidders, and the mediating effect was not significant when auction rounds be treated as mediating variables. Therefore, this paper concludes that the parcel area first affected the number of bidders, causing varying degrees of competition, thereby affecting the floor price of residential land transactions.