Permanent income,hedonic prices,and demand for housing: New evidence

Housing demand is examined by looking quite specifically at the income and price variables based on individual household data. Permanent and transitory incomes are computed through instrumental variables related to human and nonhuman wealth. A price is constructed by spatially varying hedonic techniques. Separation of measured income into permanent and transitory components substantially improves the predictive power of the housing demand estimation and leads to demand elasticities of +1 and ?1 with respect to permanent income and price. The permanent income elasticity is roughly twice the measured income elasticity.     

我国新建住宅长期供给价格弹性估算——基于35个大中城市的实证研究

大多数住宅模型和政策分析,都直接或间接依赖于住宅供给价格弹性的估计值：为了应对市场需求冲击,是多供给住房还是提高住宅价格？基于Mayo（1981）构建的模型,估算了我国35个主要大中型城市的新建住宅供给价格弹性。根据流量模型,2000-2007年我国的新建住宅价格弹性系数在4-11之间,2008到2013年的价格弹性在5-13之间。而存量调整模型得到了截然不同的估算结果：2008-2013年我国的新建住宅供给价格弹性在1-6之间,更精确的估算出了我国新建住宅供给市场的价格弹性。     

Tenure choice and housing demand in Japan

This paper reports the results of an empirical analysis of tenure choice and housing demand that makes use of household-level data from Japan. The paper finds that the price and permanent-income elasticities of demand for owneroccupied housing are approximately −0.8 and 1.4, respectively, and that these estimates are highly robust. The price elasticity estimate is comparable to those for other countries, but the income elasticity estimate is much higher, possibly because of the greater accuracy of the income variable. It is also found that the tenure choice and housing demand decisions are apparently not made simultaneously.     

The demand for housing in developing countries: The case of Korea

This paper presents the results of an analysis of urban housing demand for Korea taking into account the most recent findings of housing demand analysis concerning specification and aggregation biases. In order to obtain correctly specified demand functions, a procedure based on a model of the housing market originally proposed by Muth is used. Drawing on the detailed land information available in Korea, this procedure permits the calculation of an individual price per unit of housing services for each household. The results show conclusively that both the income and price elasticity of the demand for housing services in Korea are comparable to those found in the United States: the income elasticity is smaller than one and the price elasticity is negative and smaller than one in absolute value. Given the number of countries found within the per capita income range between Korea ($700) and the United States ($7800), the finding that these two countries have comparable demand elasticities is of major significance: in the absence of good national estimates, the order of magnitudes found here would be used for other country analyses.     

Housing demand in Mexico

This paper analyzes the components of housing demand in Mexico in the context of developing and developed nations. The case of Mexico is particularly interesting given that population and income dynamics, as well as current housing shortages, suggest that the demand for housing will significantly increase in the near future. We use micro-level data from market-based mortgages that originated during the period of 2002 to 2004 for 21 metropolitan areas in Mexico. We find the price elasticity of housing demand to be ?0.3, lower than previous studies for developed countries and within the range for developing countries. Permanent income is a major component of housing demand, with an elasticity of 0.8. In contrast, temporary income has a very low elasticity of 0.04. The mortgage rate elasticity for 25-year mortgages is ?0.39. We believe these results provide important information to policy makers and practitioners in Mexico and other developing nations.     

The demand for rental housing: Evidence from the Housing Allowance Demand Experiment

This paper provides new evidence on the price and income elasticities of demand for rental housing by low income households. Housing expenditures of households participating in the Housing Allowance Demand Experiment and receiving housing allowances in the form of a proportional rent rebate are analyzed. These rent rebates experimentally vary the effective relative price of housing and thus enable estimation of the price elasticities. Natural income variation enables estimation of income elasticities. Analysis is carried out using two functional forms and a variety of models of housing dynamics. The estimated income and price elasticities of demand are 0.36 and −0.22, respectively. When the sample is restricted to include only households headed by couples, the elasticity estimates are 0.47 for income and −0.36 for price. These estimates are lower (in absolute value) than have been previously estimated and it is suggested that this may be due to the low-income nature of the sample.     

政府保障房供求补贴的不同效果

解决中低收入人群的基本住房问题是实现社会公平的基本国策之一。为了有效地实施保障性安居工程，通过构建数学模型研究在财政补贴率相同的条件下，住房消费补贴与住房供给补贴的成交价格、成交量与社会福利情况，可以发现这两者之间存在较大的差别，前者的成交价格、成交量和社会福利都高于后者，但前者比后者的财政补贴额更多。如果提高财政补贴率，那么前者成交价格会不断提高，而后者成交价格会不断降低，成交量都会呈现扩大趋势。成交价格、成交量和社会福利不但与财政补贴率及其补贴方式有关，也与住房的需求弹性和供给弹性有关。研究结论的政策意义在于，如果在政府财力有限、住房价格上涨压力较大的条件下，应当采用住房供给补贴；如果在政府财力相对宽松、住房价格上涨压力相对较小、依靠住房拉动经济增长的压力较大的条件下，则应当采用住房消费补贴，同时它还能实现公平与效率兼顾的目的。无论是采用住房消费补贴还是住房供给补贴，都应当增大供给弹性，减小需求弹性。     

Tax evasion and work in the underground sector

A bivariate random effect panel data model is estimated for male labour supply in the taxable and the non-taxable sectors in Denmark. The wage rates and non-labour income have significant effects on labour supply in both sectors. The average own wage elasticity with respect to underground labour supply is found to be small, 0.02, while the cross price elasticity from regular wages is larger, − 0.52. Simulations of potential tax reforms show that a reduction of the marginal taxes has minor effects on male labour supply to the untaxed sector, while the effect on male labour supply to the taxed sector is larger.     

Are housing benefit an effective way to redistribute income? Evidence from a natural experiment in France

In this paper, I show that in-kind benefit such as a housing benefit program may have a significant impact on the price of the subsidized good. I use a French housing benefit reform to evaluate the impact of the subsidy on the level of rents. The results indicate that one additional euro of housing benefit leads to an increase of 78 cents in the rent paid by new benefit claimants, leaving only 22 cents available to reduce their net rent and increase their consumption. This large impact of housing benefit on rents appears to be the result of a very low housing supply elasticity. I show that the housing benefit reform induced additional demand, not only from low income households but also from students who used the benefit to become independent. Unfortunately, this increase in demand was unmatched by increasing housing supply in the short and middle term. The only possible effect of the reform is a small increase in housing quality. These results raise questions about the use of such in-kind transfers when the supply of the subsidized good is almost inelastic. It is therefore very important to estimate the incidence of the subsidy when assessing the efficiency of such welfare programs.     

Adaptation investments and homeownership

This article develops a model where ownership improves the efficiency of the housing market as it enhances the utility of housing consumption for some consumers. The model is based on an extended Hotelling–Lancaster utility approach in which the ideal variant of housing is obtainable only by adapting the home through a supplementary investment. Ownership offers low costs of adaptation, but has high contract costs compared with renting. Consumers simultaneously choose housing demand and tenure, and because of the different cost structure only consumers with strong preferences for individual adaptation of the home choose ownership. This article analyses the consumer’s optimization. The model provides an explanation for the observation that homeowners typically live in larger dwelling units than tenants. It also provides an explanation for a high price of housing services tending to reduce homeownership rates.     

Quantile-regression estimates of cigarette demand elasticities for the United States

Using a simple model and state-level cross-section U.S. data from 1993 to 1999, quantile-regression estimates of price elasticity and income elasticity for cigarette demand are obtained. It is noted that price elasticity shows a sizable variation across the high and low quantity-quartiles. There is a similar variability in the income elasticity, but most of these estimates lack statistical significance. Besides providing an indication of the variation in the price (and income) elasticity for different consumption levels, the exercise suggests some interpretative caution in regard to estimates from constant-elasticity models.     

A panel data analysis for housing affordability in Taiwan

Although the equilibrium relationship between household income and house price is well documented in previous theoretical studies, the empirical results are usually unfavorable. This article examines whether a long-term relationship between house price and income exists through a panel integration and cointegration methodology in analyzing data from four cities in Taiwan from 1980 to 2007. The findings support the existence of a long-term equilibrium relationship between income and house price, which indicate that housing affordability in Taiwan is stable. After controlling other variables, the income elasticity of house prices on average is close to one. Furthermore, evidence points to a bi-directional causality between income and house price.     

Housing supply price elasticities revisited: Evidence from international, national, local and company data

This paper re-examines one of the key parameters in housing economics – the price elasticity of housing supply. In the international literature, there is little agreement on its value or even on the appropriate methodology for its measurement. The paper argues that different spatial scales capture different aspects of the problem and, therefore, there is merit from comparing results at international, national, local and firm level. Using standardised models, there is evidence that the responsiveness of housing supply to market conditions is lower in Britain than in the US or Australia. However, supply is more responsive to the change in house prices than their level. With exceptions, most past research on supply in Britain concentrates on the national or regional dimensions. The paper finds that there are also insights to be obtained from examining local and firm level data. Local estimation across the Thames Gateway shows the importance of planning constraints on supply elasticities, but historical patterns of land use and geography are also important. Firm level data indicate that supply elasticities are greater for large firms than for small firms.     

The price responsiveness of housing supply in OECD countries

The responsiveness of housing supply to changes in prices bears important implications for the evolution of housing prices and the speed of adjustment of housing markets. Based on a stock-flow model of the housing market estimated within an error correction framework, this paper estimates the long-run price elasticity of new housing supply in 21 OECD countries. Estimates suggest that the responsiveness of housing supply to price changes varies substantially across countries. It is relatively more flexible in North America and some Nordic countries, while it is more rigid in continental European countries and in the United Kingdom. The responsiveness of housing supply depends not only on national geographical and urban characteristics but also on policies, such as land use and planning regulations.     

The price elasticity of the supply of single-family detached urban housing

Past attempts to estimate the price elasticity of the supply of housing have erred by using aggregate data. Many houses are built in areas where the volume of residential construction is low. Consequently, the influence of observations from higher-volume areas where costs may be higher is diminished. This problem is eliminated by using cross-sectional data from 61 different American urban areas, for a total of 223 observations from 1976 to 1981, to estimate a translog cost function for housing. The supply elasticity is found to be infinite.     

Managing hedonic housing price indexes: The French experience

Despite their theoretical advantages, hedonic housing price indexes are not so commonly computed by statistical agencies or real estate professionals. Many published indexes still rely on mean or median prices, or favor repeat-sales methods, which require less information about the attributes of the housing units and less econometric expertise on the part of the index compilers, but may be less accurate and robust. In France as in other countries where housing sales have to be recorded in front of a notary, data on transaction prices and characteristics of dwellings are available. Such data have been centralized since 1994, and quarterly hedonic housing price indexes have been computed for more than 10 years. This paper describes the institutional setting of housing transactions in France, and the collaboration between the notaries and the national statistical agency (INSEE). The former are responsible for data collection and regular computation, whereas the latter takes scientific responsibility for the method. The detailed information on the individual properties transacted remains proprietary data, but disaggregated indexes are publicly and freely available. This organization and assignment of roles has proven effective and might be extended to countries with similar institutional settings.     

城市商品住宅价格水平影响因素研究

商品住宅价格问题是社会关注的焦点问题.以全国35个重点城市1999年-2005年数据为基础,研究城市住宅价格水平的影响因素.研究显示,代表城市经济发展水平和居民收入水平、单位面积土地投入、城市区位和城市环境等侧面的职工平均工资、单位面积固定资产投资、人均铺装道路面积、距海岸线的距离、通过城市的国道数量、建成区绿化覆盖率这6个因素是影响城市住宅价格水平的主要因素.可以预期,当一个城市的这些因素发生相对变化和绝对变化的时候,城市的住宅价格水平必然会发生相应的变化.阳光充足、水资源丰富、交通便捷的近海地区城市的商品住宅价格变动幅度会由于经济发展、人口增加、区住条件进一步优化、投入加大等各种条件的较大变化而高于其他城市.     

中国住房供给弹性区域差异与调控政策选择——基于省际面板数据的经验分析

住房供给弹性是制定和评估房地产调控政策的重要指标,利用中国30个省市区1999—2009年的面板数据分析表明：中国住房供给弹性存在显著的区域差异性,房价、信贷、土地供给和建筑成本等因素对住房供给的影响,在东中西部地区存在显著差异性。在东部,土地政策对住房供给影响最显著,在中西部,信贷和房价政策对住房供给影响最大。中国住房需求弹性和供给弹性均存在区域差异,这表明政府应根据不同区域市场供需特性,制定针对性强的调控政策。     

House Prices and Housing Investment in Sweden and the UK: Econometric Analysis for the Period 1970–1998

We estimate quarterly dynamic housing demand and investment supply models for Sweden and the UK for the sample period 1970–1998, using an Error Correction Method (ECM). To facilitate comparisons of results between Sweden and the UK we model both countries identically with approximately almost the similar type of exogenous variables. The long–run income elasticities for Sweden and the UK are constrained to be 1.0, respectively. The long–run semi–elasticity for interest rates are 2.1 and 0.9 for Sweden and the UK. The speed of adjustment on the demand side is 0.12 and 0.23, while on the supply side it is 0.06 and 0.48 for Sweden and the UK, respectively. Granger causality tests indicate that income Granger causes house prices for Sweden, while for the UK there is also feedback from house prices to income. House prices Granger cause financial wealth for Sweden, while for the UK it is vice–versa. House prices cause household debt for Sweden, while for the UK there is a feedback from debt. Interest rates Granger cause house prices for the UK and Sweden. In both countries Tobin's q Granger cause housing investment. Generally, the diagnostic tests indicate that the model specifications were satisfactory to the unknown data generating process.     

Urban housing density and the price of housing services

Theoretical research has shown that urban housing density, defined as housing services per unit of land, is an increasing function of the price of housing services. However, this concept of density hides as well as provides information because housing services per unit of land equals the product of housing services per dwelling unit and dwelling units per unit of land. This paper proves that housing density, defined as dwelling units per unit of land, can vary either directly or inversely with the price of housing services.