The income elasticity of demand for housing: evidence from concentration curves

Article Abstract:

An alternative methodology is used to examine income elasticities of housing demand. This approach relies on Lorenz curves and related concentration functions to determine income elasticities of the underlying demand for a commodity. The advantage of this technique is that it allows estimation of income elasticities when there are no micro data needed for measuring demand functions. However, a drawback of this methodology is that it does not consider the impact of other factors that affect housing demand, thereby presenting the possibility of bias. When the 1989 American Housing Survey data is applied to this methodology, it is found that the demand for both owner and renter housing is less than unity, in general and for different incomes. Moreover, owner demand is more income elastic than renter demand.

Research, Income, Elasticity (Economics)

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Permanent and transitory income in models of housing demand

Article Abstract:

Models of housing demand usually include permanent income as a variable. Models that include permanent income as a fitted characteristic and transitory income as a residual component are analyzed for identification of situations in which such models will reflect housing markets inaccurately. Certain logical remedial strategies are shown to underestimate permanent income coefficients.

Models, Study and teaching, Cities and towns, Home ownership

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The relation between financial and housing wealth: evidence from Dutch households

Article Abstract:

This article analyzes joint investment decisions of households in the Netherlands for financial welath and homes. The results indicate that tenure choice affects financial wealth levels, but does not support the idea that people accumulate financial wealth prior to purchasing homes.

Netherlands, Statistical Data Included, Analysis, Evaluation, Economic aspects, Portfolio management, Wealth, Households

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