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The price elasticity of senior housing demand: is it a necessity or a luxury?

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  • Daniel G. Lindberg

    (Applied Economic Insight LLC
    Marquette University - Department of Economics)

Abstract

Senior housing properties provide tailored lifestyle, housing, and personal care services to aging adults. Having emerged from needs-based settings, senior housing is typically viewed as a necessity. As a result, demand estimates often rely on assumed utilization rates. We use monthly data beginning in 2017 to model occupied senior housing units as a function of price and a time trend. Our two-stage least squares approach provides an estimate of senior housing’s price elasticity of demand. Results show elasticity coefficients of greater than one, implying senior housing market is more of a luxury than a necessity.

Suggested Citation

  • Daniel G. Lindberg, 2022. "The price elasticity of senior housing demand: is it a necessity or a luxury?," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 57(4), pages 204-216, October.
    • Handle: RePEc:pal:buseco:v:57:y:2022:i:4:d:10.1057_s11369-022-00282-3
    DOI: 10.1057/s11369-022-00282-3
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    References listed on IDEAS

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