An econometric model of housing price, permanent income, tenure choice, and housing demand

This paper addresses the determination of housing price, permanent income, tenure choice, and housing demand. Full housing demand elasticities incorporate the interactive effects among the four stages of the model. Price and income have major effects in the tenure choice equation. Sociodemographic variables, such as age, have complex effects that may be lost in simpler forms of estimation.     

An alternative model for fair share allocation of lower income housing

A linear programming model was developed and presented for fair-share allocation of lower income housing as an alternative to existing heuristic models. The model is applied for the Middlesex County region in pursuit of a regional fair-share of lower income housing needs for the year 1975 for each township in the county. The results are presented and compared with those of the Court's allocation, held by the Superior Court of New Jersey in May 1976 for the Middlesex County region.     

A simple urban growth model with durable housing

In the last decade the static theory of residential urban location and land use has been extensively developed. The theory has generated many useful insights, but because it ignores growth and the durability of housing and urban infrastructure there are many urban phenomena it cannot explain. In this paper a simple urban growth model with durable housing, in which all builders have perfect foresight, is presented. The discussion focuses on the qualitative differences between the economics of this model, the static class of models, and a class of dynamic models in which myopic expectations are assumed.     

An ordered probit model for estimating racial discrimination through fair housing audits

An ordered probit model is used to measure racial discrimination in the rental housing market for the Detroit metropolitan area during the 1980s. Racial differences persist in (1) rental units suggested to the homeseekers, (2) units actually inspected by them, (3) rental terms and conditions quoted, (4) information on the neighborhood amenities, and (5) qualifications of the homeseekers, but they appear to be declining over time. Agent prejudices and racial composition of neighborhoods in which rental units are located are significant in explaining discrimination.     

A dynamic model of housing production

This paper derives the optimal development strategy for a housing producer with perfect foresight in a steady-state environment where dwellings deteriorate as they age. Under the assumption of zero demolition costs, the optimal strategy is an infinite sequence of identical buildings. Building abandonment is shown to be possible with positive demolition costs. A solution highlighting the model's spatial properties is computed using Cobb-Douglas functions.     

The economics of urban yard space: An “implicit-market” model for housing attributes

A theoretical housing model is developed embodying the approach of the recent hedonic price literature. Instead of focusing on a scalar “housing service” consumption measure, the model portrays housing as a commodity with two attributes: floor space and yard space. Developers react to a consumer bid-rent function, which relates dwelling rent to floor space, yard space, and location, in choosing the profit-maximizing characteristics of their housing complexes. The spatial behavior of the developer's choice variables is investigated (an interesting question is whether yards are larger farther from the urban center), and a comparative static analysis of the housing market equilibrium is presented.     

A dymimic model of housing price determination

This paper presents and estimates a model of the resale housing market. The data are a cross-section of monthly time series obtained from the multiple-listing service for a suburb of San Diego. The model is specified and estimated as a dynamic multiple indicator multiple cause system of equations where the capitalization rate is taken to be an unobservable time series to be estimated jointly with the unknown parameters. These are estimated by maximum likelihood using an EM algorithm based upon Kalman filtering and smoothing.The specification of the model features hedonic equations for each house sale and a dynamic equation for the capitalization rate which is constrained to make the expectation of prices equal the present value of the net returns to home ownership whenever the economic variables stabilize at steady state values. Out of steady state, the capitalization rate slowly adapts to new information.The model attributes a large portion of housing price increases of the 1970's to a fall in the capitalization rate which in turn was driven by rental inflation, tax rates and mortgage rates. Post-sample simulations indicate an initial flattening of housing inflation rates and later a fall brought on by the increase in steady state capitalization rates. In-sample simulations show that although both Proposition 13 and the inflation induced rise in the marginal income tax rates provided partial explanations for the fall in capitalization rates, the single most important factor was the acceleration in price of housing services which interacted with the tax treatment of home ownership to produce an amazing 18% average annual rate of price increase over the last seven years of the 1970's.     

A model of rental and owner-occupied housing

A complete model of owner-occupied and rental housing is developed. The model allows for the endogenous determination of rents, the user cost of owner-occupied housing and housing tenure choice by individuals. In the short run, structure prices are endogenous, while in the long run the size of the housing stock adjusts to equate structure prices to exogenous construction costs. Comparative static results emphasize the importance of marginal tax rates and distinguishing between the short and long run for a complete understanding of the impacts of inflation on housing markets.     

A linear programming model of housing market equilibrium

This paper reviews Wheaton's assertion that the Herbert-Stevens Linear Programming Model produces solutions which do not meet Alonso's criteria for market equilibrium. It demonstrates that, although Wheaton's criticism is valid in general, under certain conditions an alternative specification of the objective function coefficients and the dual variables in the linear program produces a model whose solutions satisfy Alonso's criteria. Finally, this paper shows that the NBER model is an application in which a linear programming problem computes market equilibria.     

基于房屋特征模型的房价影响因素研究

文章基于房屋特征模型,对二手房房价影响因素进行回归分析。研究表明,嘉兴二手房房价主要影响因素为装修程度,随着装修程度每提升一个档次,房屋单价会大幅上升,但与此同时,随着装修程度的提高,房屋单价的上升幅度会逐步减弱,同时,房屋所在层数、室厅总数、房龄、所在地段和是否是学区房也对房屋单价存在一定影响。     

The comparative statics of a filtering model of housing with two income groups

This paper examines a simple filtering model of housing with two income groups. It identifies two qualitatively different long-run stationary state equilibria. In the first, construction occurs at two different qualities. In the second, construction occurs at a single quality. It presents the comparative statics of both types of equilibria, with respect to changes in the population and income of the two different groups, and with respect to income subsidies that are given to some of the members of a group,     

Estimation of variance of housing prices using spatial conditional heteroskedasticity (SARCH) model with an application to Boston housing price data

In this paper we investigate housing price volatility within a spatial econometrics setting. We propose an extended spatial regression model of the real estate market that includes the effects of both conditional heteroskedasticity and spatial autocorrelation. Our suggested model has features similar to those of autoregressive conditional heteroskedasticity (ARCH) in the time-series context. We utilize the spatial ARCH (SARCH) model to analyze Boston housing price data used by Harrison and Rubinfeld (1978) and Gilley and Pace (1996). We show that measuring the variability of housing prices is an important issue and our SARCH model captures the conditional spatial variability of Boston housing prices. We argue that there is a different source of spatial variation, which is independent of traditional housing and neighborhood characteristics, and is captured by the SARCH model.     

A commodity hierarchy model of the rental housing market

This paper presents and analyzes a theoretical model of the rental housing market which addresses the durable-good nature and the heterogeneous nature of housing, while focusing on the quality distribution of housing units. Units of different qualities are viewed as distinct substitute commodities. New construction rates, deterioration rates, rental prices, and stocks are considered to be endogenous. Equilibrium concepts are introduced; both the long-run and short-run equilibria are shown to exist and to be unique. Comparative static results are established. The model's utility is demonstrated by its application to the analysis of several housing market programs.     

Owner-occupied housing in a model of exchange rate determination

This study explores the effect of owner-occupied housing asset holdings on the short and long run determination of exchange rates. In the presence of consumption goods that can simultaneously serve as investment allocation subject to capital gains—such as owner-occupied housing—the general equilibrium model, based on the Obstfeld and Rogoff Redux model, produces exchange rate overshooting both in the presence and in the absence of price rigidities in the markets for final goods. This effect depends on the size of owner-occupied housing expenditures relative to total consumption expenditures, the initial level of housing market inflation, capital gains in housing and other parameters of the model. Depending on parameter values and initial conditions, the model supports the possibility for exchange rate dynamics that include either overshooting or undershooting.     

Urban housing with discrete structures

Competitive equilibrium in an urban housing model with structures that cannot be readily aggregated or subdivided is analyzed in this paper. The price and quantity of services forthcoming from each dwelling occupied by a household is determined by the equality of competitive supply and demand. A stack algorithm is then developed to ensure households are assigned to dwellings so that they would not prefer to live in any other dwelling with an equilibrium price less than the one they would pay if they lived there. Using the Urban Institute Housing Model as an example, the results of this algorithm are compared with those of the algorithm developed by de Leeuw and Struyk (D-S). The stack algorithm yields greater price discounting of existing dwellings below the price of a new dwelling than does the D-S algorithm and, thus, a greater potential for housing prices to be increased by a demand subsidy such as a housing allowance.     

Rehabilitation decisions in rental housing: An empirical analysis

Housing policy-makers show increased interest in encouraging rehabilitation of the existing housing stock. But little is known about what factors influence the decision to invest, particularly in rental housing, making policy design difficult. This paper presents an empirical analysis of individual landlords' housing rehabilitation decisions in one housing market. The analysis tests hypotheses about the impacts of detailed neighborhood, structure, and site characteristics on each owner's investment activity. Findings support the general hypothesis that economic returns to investment have a major effect on rehabilitation decisions, identify some other important circumstances, and suggest which among many specific policy levers should be effective.     

The value of legal housing titles: An empirical study

This paper estimates the value of legal housing titles using a Costa Rican urban housing survey conducted in 1997. The general results obtained regarding the value of legal titles to the average individual are consistent with past estimations found in the literature, but the implications for policy are new; as some groups are shown to value legal titles more than others. The criterion used to create these groups was inspired by the theoretical guidelines provided by past literature and could be easily reproduced by policy makers who may wish to target these types of individuals.     

An alternative test of the hedonic theory of housing markets

In this paper the hedonic theory of housing markets is used to generate a multinomial logit model of household behavior in an urban housing market. Application of hedonic theory to housing markets is by now fairly familiar and a link to multinomial logit has also been established. However, by emphasizing more heavily the bid price interpretation of hedonic theory, this paper develops a new connection to econometric estimation that essentially involves running the usual logit equations in reverse. One advantage of this approach is that the link between the logit equations and hedonic theory involves bid price rather than utility functions, and this in turn permits the empirical results to be given an extremely clear interpretation. Furthermore, in contrast to the standard logit model, the extreme value distribution required to justify the estimation technique emerges endogenously as part of the analysis.