Study On The Pricing Model Of Valuation Of Land Use Right

With the constant improvement of China's land policy,the continuous expansion of land circulation and land market increasingly prosperous,land appraisal has become an essential part of market economy.Our country has experienced by the main way to obtain land use right through the government allocated to change the way of national land,access method enables the land to the transfer of land use right according to the law of market circulation,conducive to the healthy development of land market in China.But how to scientifically evaluate and determine the land price,has become another problem in the work of land access sell one's own.Evaluation of transfer floor price is too low will cause the loss of state-owned land assets,and too high will cause no one bid or raising land market average price level of land use rights.More with the western developed countries,compared to improve the system of land appraisal theory and the value evaluation system of land use rights still exists a certain gap.Therefore,academia should actively explore new methods that are suitable for China's national conditions to evaluate land use right,innovate the land use right pricing method on the basis of traditional evaluation methods,continuously improve and perfect the evaluation system of land use right in our country.This paper aims at serving as a critical analysis of traditional methodologies and Real Options methodologies that have so far been applied to the evaluation of intangible assets and as a practical guide to understanding the limitations of traditional methods for new trends.This is particularly for applications in the evaluation of land use right,given the different types of uncertainty in the land transaction market.In order to do so,and based on an extensive relevant literature review,the analogies with financial options are first presented,with various assumptions and their validity being clearly discussed in order to understand if,when,and how specific methods can be applied.It is then argued how option theory is in most cases not directly applicable to investment in evaluation of land use right but requires the consideration of its characteristics,thus a new option pricing model is required.In this study,a option pricing model is developed based on the real option valuation and the characteristics of land use right.The case study shows that compared to the results from the existing methods,the result from the developed model is closer to the actual result.Finally,recommendations are given for future research to develop more practical real option pricing model to assess the land use right.