Real options, housing price risk, and urban sprawl: A case study of the Toronto census metropolitan area using remotely sensed data, 1986-2016

摘要

What is the role of housing price risk in explaining the timing and the extent to which development sprawls at the urban fringe? Price risks create a real option, which incentivizes developers to delay development, thereby slowing down urban sprawl. We interpret satellite imageries of Toronto in 1986-2016 and match the changes in land-use/cover with residents' socioe-conomic status as well as price and risk data. We find that higher-risk areas experienced 3-5 percentage points slower growth in urban coverage in 1986-2016; if policy is to stabilize price risk, urban coverage could have increased by 7.02-9.79%.