Abstract
The purposes of this paper are to analyze the structure of and changes in land values in the commercial district of Edo city in the second half of the Tokugawa period (eighteenth to mid-nineteenth century), and to take a new look at the stability of real estate as a long-term financial asset. This paper has an advantage in calculating real prices using an income capitalization approach, whereas previous studies have not examined the relationship between land utilization and land asset. The first of two major discoveries is the rise of real land values in the eighteenth century, in spite of the decline in real land rents. It seems that the rise was caused by an economic environment characterized by: a decrease in money demand for commodity transactions, a reduction in interest rates, and an increase in currency issue. The second is the heavy fall in land values in the first half of the nineteenth century. Although the interest rates were lowered further, merchants lowered their main-street land price estimates down to back-street levels. These facts suggest speculation in the real estate trade in Edo during the Tokugawa period.
