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The price responsiveness of housing supply in OECD countries

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  • Caldera, Aida
  • Johansson, Åsa
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    Abstract

    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.

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    Bibliographic Info

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

    Volume (Year): 22 (2013)
    Issue (Month): 3 ()
    Pages: 231-249

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    Handle: RePEc:eee:jhouse:v:22:y:2013:i:3:p:231-249

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

    Related research

    Keywords: R31; R21; R38; H11; Housing supply; Housing markets; House prices; Land use regulation;

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    References

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    Cited by:
    1. Bracke, Philippe, 2013. "How long do housing cycles last? A duration analysis for 19 OECD countries," Journal of Housing Economics, Elsevier, vol. 22(3), pages 213-230.

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