The timing of land development: An invariance result

The Arrow-Fisher-Henry (AFH) analysis of land development under uncertainty has been conducted in a two-period model. Recently, Capozza and Helsley (1990) and Batabyal (1995) have addressed the question of land development under uncertainty in a many-period setting. In this paper, aspects of this literature art extended by analyzing the land development question in a Markov decision theoretic framework. Inter alia, it is shown that the timing of land development is invariant to the manner in which a landowner uses information about the consequences of development.