Life-cycle theory, inflation, and the demand for housing
Article Abstract:
A number of studies have concluded that the overall effect of economy-wide inflation on housing demand is adverse. However, extending Robert M. Schwab's analysis of intertemporal utility maximization (which employs Fisher-type models), by incorporating a continuous life cycle model, indicates that a negative inflation-housing demand relationship is only obtainable with absolute borrowing constraints and real interest rates that are lower than consumer discount rates. Research into the effects of inflation on the demand for housing yields new theories as to what economic variables affect housing demand; among the variables most likely to affect demand are: credit constraints within housing markets, costs of capital and costs of borrowing. A liquidity-constrained model of housing demand is developed and analyzed, in light of the apparent importance of these economic variables.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1985
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On capital-land substitution in urban housing production
Article Abstract:
A weak disposability of inputs (WDI) production function with constant elasticity of substitution and variable elasticity of substitution variations is applied to Santa Clara County single family housing data to develop a measure of substitution between capital and land in urban housing production. The WDI appears to be an appropriate specification of urban housing production, indicating that the elasticity of land-capital substitution is a nonmonotonic function.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1985
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Estimating the income, price, and interest elasticities of housing demand
Article Abstract:
Past studies have divided their analysis of the housing market into either stock or flows characteristics. The current research uses a stock and flow equilibrium model to incorporate the characteristics of both models into the analysis of housing markets. The market and flow excess demands are held at zero for the estimation of income, price, and interest elasticities.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1989
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