User Cost and the Demand for Housing Attributes
AbstractA number of studies have related changes in the demand for housing to changes in user cost. All have treated housing as a composite good rather than as a bundle of characteristics. We consider the effect of changing user cost on the demand for the component characteristics of owner-occupied housing, and, given information about the supply of the characteristics, we predict implicit price responses. An empirical test of our model indicates that reductions in user cost result in higher real prices for the non-replicable attributes of housing, examples being location and access to fixed amenities. In contrast, the price of attributes that are perfectly elastic in supply are not affected by changes in user costs. We conclude that the effects of changing user cost are not uniform across housing types and locations, thus generating the appearance of housing submarkets. Copyright American Real Estate and Urban Economics Association.
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Bibliographic InfoArticle provided by American Real Estate and Urban Economics Association in its journal Real Estate Economics.
Volume (Year): 19 (1991)
Issue (Month): 3 ()
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- Donald R. Haurin & Patric H. Hendershott & Dongwook Kim, 1991.
"Local House Price Indexes: 1982-1991,"
Real Estate Economics,
American Real Estate and Urban Economics Association, vol. 19(3), pages 451-472.
- Steven C. Bourassa & Donald R. Haurin & Jessica L. Haurin & Martin Hoesli & Jian Sun, 2009.
"House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics,"
Real Estate Economics,
American Real Estate and Urban Economics Association, vol. 37(2), pages 259-278.
- Steven Bourassa & Donald Haurin & Jessica Haurin & Martin Hoesli & Jian Sun, 2007. "House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics," Working Papers 07-03, Ohio State University, Department of Economics.
- Steven C. BOURASSA & Donald R. HAURIN & Jessica L. HAURIN & Martin HOESLI & Jian SUN, 2005. "House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics," FAME Research Paper Series rp160, International Center for Financial Asset Management and Engineering.
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