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In the hedonic model, implicit market prices can be interpreted as the present values of rents per unit of each hedonic characteristic. But when rents rise, there may be substantial value associated with the option to redevelop to higher intensity per unit land value. In the presence of option value, we first demonstrate that hedonic linear regressions should include an additive nonnegative term for the value of the option. This term increases in the variance of the underlying stochastic process. If this term is omitted, then estimates of implicit market prices for desirable (undesirable) characteristics will be biased downward (upward). This prediction is supported by recent empirical studies. We further suggest that future empirical work can employ the nonlinear functional form derived from our theory.

We provide a long-term assessment of finance research in the Asia–Pacific region. Similar to the earlier findings in Chan et al. (2001) and Chan et al. (2005), the Asia–Pacific academic institutions, as a group, perform very well during 1990–2008. The two quality-adjusted weighted article metrics suggest that institutions in the region exhibit an increasing trend in the absolute number of articles and the relative percentage share of global research output. The Gini coefficients, while showing that the degree of concentration of research output continues to be high, suggest that the degree of research output concentration steadily decreases over the period. During the sample period, the top five institutions are Hong Kong University of Science and Technology, the University of New South Wales, Chinese University of Hong Kong, National University of Singapore, and Hong Kong Polytechnic University. The top two researchers' percentage share of total research output ranges from a low of 18.7% in Hong Kong University of Science and Technology to a high of 59.8% in RMIT University. Among the top 25 institutions, a total of 14 top researchers (28%) have left their affiliated institutions as of June 1, 2009, suggesting considerable job mobility among active researchers.