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

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  • Ball, Michael
  • Meen, Geoffrey
  • Nygaard, Christian

Abstract

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 19 (2010)
Issue (Month): 4 (December)
Pages: 255-268

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Handle: RePEc:eee:jhouse:v:19:y:2010:i:4:p:255-268

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Web page: http://www.elsevier.com/locate/inca/622881

Related research

Keywords: Price elasticity Housing supply International comparisons Planning Spatial persistence;

References

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Citations

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Cited by:
  1. Oliver Lerbs, 2012. "House Prices, Housing Development Costs, and the Supply of New Single-Family Housing in German Counties and Cities," ERSA conference papers ersa12p258, European Regional Science Association.
  2. Elias Oikarinen & Risto Peltola & Eero Valtonen, 2014. "Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country," Discussion Papers 91, Aboa Centre for Economics.
  3. Lerbs, Oliver W., 2012. "House prices, housing development costs, and the supply of new single-family housing in German counties and cities," CAWM Discussion Papers 57, Center of Applied Economic Research Münster (CAWM), University of Münster.
  4. Xiangling Liu & Glenn Otto, 2014. "Housing Supply Elasticity in Sydney Local Government Areas," Discussion Papers 2014-13, School of Economics, The University of New South Wales.
  5. Oliver Lerbs, . "House Prices, Housing Development Costs, and the Supply of New Single-Family Housing in German Counties and Cities," Working Papers 201283, Institute of Spatial and Housing Economics, Munster Universitary.
  6. Judith Yates, 2011. "Housing in Australia in the 2000s: On the Agenda Too Late?," RBA Annual Conference Volume, in: Hugo Gerard & Jonathan Kearns (ed.), The Australian Economy in the 2000s Reserve Bank of Australia.

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