Henry George ...
Study Concept: Managua, the capital of Nicaragua, houses more than a quarter of the national population (4 million+) and is the country's center of economic "progress" and material accumulation. This study concerns itself with the relative increase in real estate prices as an indicator of the same tendency in increase in land rent land speculative land value. Although it is theoretically possible that capital improvements in the lands studied could account for the additional value, the fact that the aggregate increase in the measured increased real estate value does not have a parallel measured increase in any other Nicaraguan economic indicator, would indicate that the rise in value is more due to aggregate demand for access to land itself (a fixed resource) than a rise in fair exchange value for capital improvements.
Source Data: Nicaraguan daily news periodicals El Nuevo Diario and La Prensa, classified advertisement sections, Jan 1999 to Dec 2004.
Data Sample: Advertised sales prices of real estate properties in 64 Managua neighborhoods noted for every two week period, or as necessary, from Jan 1990 to Dec 2004, to establish a minimum number of samples per year for a neighborhood's inclusion in the survey. Number of samples ranged from 5 to 60 per month per zone.
Tabulation and Presentation of Results: Prices significantly above or below the graphic mean for each neighborhood in each year were discarded and the arithmetic mean of the remaining prices calculated. The average mean of the average yearly real estate prices of all neighborhoods in Managua and for Managua as a whole were calculated and plotted on line graphs.
Margen of Error: The present study does not distinguish between undeveloped land and developed land and real estate values, but shows the relative advance of real estate prices in the Managua market. There is a probable wide margen of error for any specific data in any specific years, but the similar tendencies at the level of neighborhoods and their similarity with the overall general tendency of the capital would indicate a generally valid result.
Interpetation of Results: The calculated data is admittedly general in its scientific precision and for that reason is that more convincing in the consistent results which they show: that land and real estate prices in Managua have risen steadily in Managua since 1990. This may be due in part to private capital investment in real estate properties, but
Of Comparative Interest: Also rising in the same period were: general urban and rural poverty, unemployment and underemployment, consumer and producer prices; lack of adequate public health and social services; crime, corruption, and substance addiction. Wages and earning on capital investment have been largely stagnant at a subsistence level during the decade. It is interesting to note the effect that the November 1998 event of Hurricane Mitch, and the subsequent donations for rebuilding had on Real Estate prices in the following year.
E-mail IHG with your own thoughtful analysis of the results or method of this study.
General real estate prices have risen steadily in the Nicaraguan capital over the last decade.
Though some relative prices may have dropped due to smaller lots on the market, the overall tendency of higher prices continued.
. . . .
Prices tended to rise more as a total in areas with more public and private investment.
.. . .
Areas such as those represented in the above two graphs, received little public and private investment, but prices still rose as a result of increased demand for land which was due to population growth caused by immigration from rural areas with an excessively low minimum wage.
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