Work

Land valuation in the metaverse: location matters

Year: 2024

Type: article

Abstract: In urban economics, transportation costs are a key determinant of land value. However, in virtual worlds, these costs are generally limited by the users’ ability to teleport. Drawing from urban and attention economic literature, we propose a theoretical model microfounded on user behavior. The model suggests that the relative value of land parcels hinges on their potential to attract visitors. Our empirical analysis supports this by demonstrating that location remains crucial in virtual worlds and highlighting the role of the teleportation threshold. We discuss the model’s general applicability, reaffirming the significance of location within most virtual worlds.

Source: Journal of Economic Geography

DOI: 10.1093/jeg/lbae027

Authors: Mitchell Goldberg, Peter Kugler, Fabian Schär

Institution: University of Basel

Language: English

Topic: Regional Economics and Spatial Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: hybrid

Estimated APC paid: $4,664