This book addresses essential questions about housing by building theoretical models based on various real world problems in Japan and testing these models using econometric methods. Almost all related empirical analyses use Japanese household longitudinal data. Accordingly, the author analyzes whole aspects of the data, based on an understanding of the actual situation, theory, and empirical analysis, to directly derive a vision of a future housing policy.

Why are houses expensive and difficult to obtain in Japan? Why do people have to live in small houses? Why do people not relocate frequently? Why is the earthquake insurance subscription rate so low, particularly in an earthquake-prone country such as Japan, even after such a catastrophic event as the Great East Japan Earthquake of 2011? How do existing housing finance and tax policies or laws relate to these real world problems? To answer these questions, the book clarifies the unique criteria that characterize housing problems in Japan and presents a vision of future housing policy.

The short answer is that existing housing finance policy that adopts criteria based on the floor space of houses creates incentives for people to live in even smaller houses. Furthermore, the Japan Rental Act, which affects people renting homes, reduces residential mobility. The incidence of underinsurance against earthquake risk is a result of earthquake insurance market imperfections such as crude and rough geographical risk ratings.

The book elaborates on these factors in four parts and will be of interest to all readers who are concerned with the housing market and household behavior in Japan.

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Miki Seko is professor emeritus of Keio University and professor of economics at Musashino University, Tokyo, Japan. Her research on topics relating to housing has appeared in the Regional Science and Urban Economics, the Journal of Housing Economics, the Journal of Real Estate Finance and Economics, the Journal of Property Research, and the Journal of Economic Issues, **amongst others. Her research interests are in housing demand, housing price dynamics, housing policy, earthquake risk, and disaster prevention policies. Currently, she serves on the editorial boards of two real estate and urban economics journals. She was president of the Asian Real Estate Society and has co-authored A Companion to Urban Economics (Blackwell Publishing, 2006). She received the 57th Nikkei Economics Book Prize in 2014.

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