Determinants of Land Use and Property Value

Urban land use and property values were once a weak link in economic theory. A lot of research has been done over the years on land use and property value but the basis or foundation of models used for property value analysis has not been illuminated. This has established the nexus between Alonso’s Bid Rent theory and the Monocentric City Model. A review of previous research works on the subject area was done. The data was obtained through documentary secondary sources. The findings from the review revealed that all the determinant factors of land use and property value revolve around the traditional hedonic postulation of willingness to pay (WTP) for structural, locational and neighbourhood attributes of property. These were based on Alonso’s Bid Rent theory and Rosen’s Hedonic Price Model reaffirming the link between them. The importance of utility, interest and willingness to pay (WTP) for property attributes will be better appreciated by real estate scholars and professionals.