5.2 Land Price Determination

The primary application of the Urban Land Value Field (ULVF) framework is the determination of land prices based on the spatial organization of urban value. Unlike conventional valuation methods that estimate individual parcel prices independently from market observations, the ULVF framework determines land prices through a hierarchical process that preserves the spatial relationships established within the Urban Land Value Field.

Within this framework, land price is regarded as the monetary expression of urban value rather than an isolated market variable. Consequently, price determination is performed after the construction of the Value Correlation Matrix (VCM), the Value Relation Matrix (VRM), and the Price Relation Matrix (PRM), ensuring that the final price distribution remains consistent with the mechanisms governing urban value formation.

The computational procedure begins with the identification of the relative value relationships among spatial units. These relationships are represented by the Value Relation Matrix, which preserves the structural organization of the Urban Land Value Field. The corresponding Price Relation Matrix subsequently transforms these value relationships into land-price relationships while maintaining spatial continuity and hierarchical consistency.

Instead of assigning prices independently to individual parcels, the ULVF framework determines land prices by maintaining the relative relationships among all spatial units within the study area. Once one or more benchmark land prices are established from reliable market observations or official reference values, the remaining land prices can be determined by propagating these reference values through the relational structure represented by the Price Relation Matrix.

Conceptually, the land price determination process can be summarized as follows:

This relational approach provides several important advantages over conventional parcel-based valuation methods.

First, it preserves spatial consistency by ensuring that neighboring locations with similar value relationships maintain compatible land prices.

Second, it preserves network continuity, allowing transportation infrastructure, accessibility, and urban functional connections to influence land prices through the mechanisms represented by the Urban Land Value Field.

Third, it preserves hierarchical organization, enabling land prices to reflect the influence of urban value centers, transportation corridors, and multi-scale spatial structures.

Fourth, the framework naturally supports dynamic updating. As transportation systems, land-use patterns, socio-economic activities, environmental conditions, or planning policies change, the Value Correlation Matrix, Value Relation Matrix, and Price Relation Matrix can be recomputed, allowing land prices to evolve consistently with changes in the urban system.

The ULVF framework is equally applicable to both official land price determination and market-oriented land valuation. In official land administration, the framework provides a scientifically consistent basis for constructing land price tables, zoning regulations, compensation schemes, and taxation systems. In market analysis, it supports mass appraisal, investment evaluation, and land market monitoring by incorporating the spatial mechanisms responsible for value formation rather than relying solely on observed transaction data.

Unlike conventional regression-based valuation models, which primarily estimate prices from statistical relationships among explanatory variables, the ULVF framework derives land prices from the spatial structure of urban value itself. This distinction enables the framework to explain not only what land prices are, but also why they vary across space and how they evolve in response to changes in urban structure.

Consequently, land price determination within the ULVF framework is not merely a numerical estimation process. It represents the final stage of a coherent analytical sequence that links urban spatial structure, value formation, value relationships, and price relationships within a unified theoretical and computational framework.