{"id":{"repo_id":"mit","oai_identifier":"oai:dspace.mit.edu:1721.1/70726"},"canonical_url":"https://search.dev.ndltd.org/etd/mit/oai:dspace.mit.edu:1721.1/70726","repository":{"repo_id":"mit","name":"MIT","base_url":"https://dspace.mit.edu/oai/request"},"display":{"title":"Effects of uncertainty on the investment decision : an examination of the option-based investment model using Japanese real estate data","abstract":"This paper examines the validity of the option-based investment model as opposed to the neoclassical investment model in the decision-making of commercial real estate development, using aggregate real estate data from Japan. I particularly focus on the effect of uncertainty because it is the central difference between the two models. I specify a structural model in order to incorporate the interactions between supply and demand in the real estate asset market. In order to conduct detailed empirical tests for a long period of time, I set three data series. The Long Series uses quarterly data of 25 years and Short Series 1 and Short Series 2 use monthly data of about 15 years. I find strong evidence that supports the option-based investment model. Especially in the supply equation, total uncertainty has significant effects on the investment decision. A lag structure is found in the effect of total uncertainty. The parameters for other variables also generally favor the option-based model. In the demand equation, too, the results strongly support the option-based investment model. It should be concluded from these results that various kinds of real options must be incorporated in investment and economic models.","abstract_html":"This paper examines the validity of the option-based investment model as opposed to the neoclassical investment model in the decision-making of commercial real estate development, using aggregate real estate data from Japan. I particularly focus on the effect of uncertainty because it is the central difference between the two models. I specify a structural model in order to incorporate the interactions between supply and demand in the real estate asset market. In order to conduct detailed empirical tests for a long period of time, I set three data series. The Long Series uses quarterly data of 25 years and Short Series 1 and Short Series 2 use monthly data of about 15 years. I find strong evidence that supports the option-based investment model. Especially in the supply equation, total uncertainty has significant effects on the investment decision. A lag structure is found in the effect of total uncertainty. The parameters for other variables also generally favor the option-based model. In the demand equation, too, the results strongly support the option-based investment model. It should be concluded from these results that various kinds of real options must be incorporated in investment and economic models.","abstract_has_math":false,"creators":["Yoshida, Jiro, 1970-"],"institution":"Massachusetts Institute of Technology","degree_name":null,"degree_level":null,"degree_discipline":null,"degree_department":"Massachusetts Institute of Technology. Dept. of Urban Studies and Planning.","school":null,"contributors":[],"advisors":["Timothy J. Riddiough."],"committee_chairs":[],"committee_members":[],"year":1999,"date_issued":"1999","date_published":"1999","updated_at":"2026-07-22T22:21:56Z","subjects":["Urban Studies and Planning."],"languages":["eng"],"rights":["M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. 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