Urban Land Price: The Extraordinary Case of Honolulu, Hawaii

The price of land in Honolulu is higher than in any other major U.S. urban area. In this paper we examine several determinants of the supply and demand for land and discuss their likely influence on Honolulu's land price. We utilize comparisons between demand and supply conditions in Honolulu and in the 40 most populous U.S. urban areas to ascertain the strength of the respective determinants. Our regression results confirm that natural and institutional constraints restricting the supply of land play an important role in determining price in Honolulu and in the 40-city sample.