Understanding land idling as a strategic behaviour: A real options approach

One possible explanation for land idling in a rapidly transforming economy can be found by looking at the value of the option to wait and hysteresis behaviour in the land market. If investors assume that the drop is temporary and that its long term prospects outweigh current holding losses, the mark...

Full description

Bibliographic Details
Main Author:	Khalid, Haniza
Format:	Conference or Workshop Item
Language:	English English
Published:	2013
Subjects:	HA154 Statistical data HB221 Price HD101 Land use HD1401 Agriculture
Online Access:	http://irep.iium.edu.my/32771/ http://irep.iium.edu.my/32771/ http://irep.iium.edu.my/32771/1/Conf_GBRC.pdf http://irep.iium.edu.my/32771/4/Dr_Haniza.pdf

id	iium-32771
recordtype	eprints
spelling	iium-327712013-11-18T02:09:37Z http://irep.iium.edu.my/32771/ Understanding land idling as a strategic behaviour: A real options approach Khalid, Haniza HA154 Statistical data HB221 Price HD101 Land use HD1401 Agriculture One possible explanation for land idling in a rapidly transforming economy can be found by looking at the value of the option to wait and hysteresis behaviour in the land market. If investors assume that the drop is temporary and that its long term prospects outweigh current holding losses, the market will observe some form of a zone of inactivity i.e., no selling and no additional buying. The fact that landowners elect to keep their valuable land underdeveloped for prolonged periods of time suggests that idled land is more flexible and valuable than what the current market price suggests. If the revenue from farming is insufficient to sustain the activity, land is left idle; although this operational decision is open to continuous revision. The numerical example shown in the paper shows that price of land can be substantially bolstered by the option to wait embedded in land. 2013-11-07 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/32771/1/Conf_GBRC.pdf application/pdf en http://irep.iium.edu.my/32771/4/Dr_Haniza.pdf Khalid, Haniza (2013) Understanding land idling as a strategic behaviour: A real options approach. In: Global Business Research Conference 2013, 7-8 Nov 2013, Kathmandu, Nepal. (Unpublished) http://www.wbiworldconpro.com/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HA154 Statistical data HB221 Price HD101 Land use HD1401 Agriculture
spellingShingle	HA154 Statistical data HB221 Price HD101 Land use HD1401 Agriculture Khalid, Haniza Understanding land idling as a strategic behaviour: A real options approach
description	One possible explanation for land idling in a rapidly transforming economy can be found by looking at the value of the option to wait and hysteresis behaviour in the land market. If investors assume that the drop is temporary and that its long term prospects outweigh current holding losses, the market will observe some form of a zone of inactivity i.e., no selling and no additional buying. The fact that landowners elect to keep their valuable land underdeveloped for prolonged periods of time suggests that idled land is more flexible and valuable than what the current market price suggests. If the revenue from farming is insufficient to sustain the activity, land is left idle; although this operational decision is open to continuous revision. The numerical example shown in the paper shows that price of land can be substantially bolstered by the option to wait embedded in land.
format	Conference or Workshop Item
author	Khalid, Haniza
author_facet	Khalid, Haniza
author_sort	Khalid, Haniza
title	Understanding land idling as a strategic behaviour: A real options approach
title_short	Understanding land idling as a strategic behaviour: A real options approach
title_full	Understanding land idling as a strategic behaviour: A real options approach
title_fullStr	Understanding land idling as a strategic behaviour: A real options approach
title_full_unstemmed	Understanding land idling as a strategic behaviour: A real options approach
title_sort	understanding land idling as a strategic behaviour: a real options approach
publishDate	2013
url	http://irep.iium.edu.my/32771/ http://irep.iium.edu.my/32771/ http://irep.iium.edu.my/32771/1/Conf_GBRC.pdf http://irep.iium.edu.my/32771/4/Dr_Haniza.pdf
first_indexed	2023-09-18T20:47:18Z
last_indexed	2023-09-18T20:47:18Z
_version_	1777409760328417280

Understanding land idling as a strategic behaviour: A real options approach

Similar Items