Formation of Industries, Land Values (or Prices), and Economic Rents in Kagoshima City

Abstract

In this study, we clarified the following points.(1) Kagoshima City has a population of about five hundred thousand. Its regional characteristics, briefly described, are-the warm and rainy climate, the“Shirasu” Plateau, ashfalls of Sakurajima volcano, a large influx of population; Nishi Station has become the center of traffic. Both oshimatsumugi (pongee) and shochu (an alcoholic drink) are the typical local industries, and the city's wholesale trade occupies the largest position in the Southern Kuyshu District.(2) We analyzed the formative factors of land values in urban and non-urban land use statically and dynamically. By this, we clarified the relation between land values and accessibility from the station or land productivity. Thus we made model formulas about their relations.(3) The city center with the highest land price moved to Tenmonkan St. from the front of Kagoshima Station with the traffic improvements and the new residential developments in front of inland. A secondary central place (subcenter shopping streets) is developing in front of Nishi Station which has become the transportation gateway, but the land prices there are now about half of the city center.(4) We made model formulas of the land prices and the proportions of land utilization in the shopping streets, And then tried to analyze the land prices and the proportions of different types of stores. Moreover, we tried to calculate the locational competitive index of the major commercial functions. We also made model formulas of the relation between the flow of pedestrian traffic and land prices, and the number of visitors of the city and the trend of the highest land values. Thus, we could grasp the formation mechanism of land prices.(5) We analyzed quantitatively the disparity between economic rents (net income of land) and land prices of representative industries (stores, inns, hotels & factories) in the city. From this analysis, we examined the various locational conditions in detail.(6) We believe that this study will provide important information for comparison with many other cities in the future.Note: In this paper, “land value”means the land values assessed by fixed property tax and capitalized land values, while“land price”means the actual selling price.