1. The developer's problem, or how to divide a piece of land most profitably
- Author
-
Noel M. Edelson
- Subjects
Urban Studies ,Microeconomics ,Economics and Econometrics ,business.industry ,Control (management) ,Conflict of interest ,Economics ,Community resident ,Distribution (economics) ,business ,Subdivision - Abstract
How a developer chooses to subdivide his landholding depends on the distribution of potential buyers and their maximum offers for different sized plots. These offers depend, inter alia, upon factors outside the developer's control such as community tax rates and public services. The developer's optimal subdivision scheme for a continuum of buyers is derived, together with the implied prices of land on different sized plots. We also illustrate the effect of alternative tax regimes on the profit-maximizing density of development, when the landholding is subdivided into equal-sized plots, and exhibit the conflict of interest between developers and existing community residents.
- Published
- 1975
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