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Determinants of Housing Expenditure in Australia

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  • G J Butler
  • J Flood
  • S N Tucker

Abstract

Research on the determinants of housing expenditure in Australia is limited by inadequate treatment of the distinction between three types of households: home renters, homeowners in the process of purchase, and homeowners who own outright. In this paper the authors use published and unpublished cross-sectional data from 1966–1968 and 1975–1976 to demonstrate the importance of the various determinants of housing across the three household types and, for the first time, to compare the characteristics at two points in time almost a decade apart. It was found that the influence of sociodemographic variables such as age, employment status, and household size was statistically significant, and that their influence varied considerably across the three household types. Detailed analysis has shown that income elasticity estimates of demand for housing were all found to be invariant over time, to be substantially less than 1.0 and to differ markedly between tenure type, with home renters having the lowest values (0.46–0.49), outright homeowners the highest (0.69), and mortgaged homeowners in between (0.53–0.59).

Suggested Citation

  • G J Butler & J Flood & S N Tucker, 1984. "Determinants of Housing Expenditure in Australia," Environment and Planning A, , vol. 16(8), pages 1099-1113, August.
    • Handle: RePEc:sae:envira:v:16:y:1984:i:8:p:1099-1113
    DOI: 10.1068/a161099
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    References listed on IDEAS

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    1. Polinsky, A Mitchell & Ellwood, David T, 1979. "An Empirical Reconciliation of Micro and Grouped Estimates of the Demand for Housing," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 199-205, May.
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    3. Rosen, Harvey S., 1979. "Owner occupied housing and the federal income tax: Estimates and simulations," Journal of Urban Economics, Elsevier, vol. 6(2), pages 247-266, April.
    4. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, May.
    5. Carliner, Geoffrey, 1973. "Income Elasticity of Housing Demand," The Review of Economics and Statistics, MIT Press, vol. 55(4), pages 528-532, November.
    6. Goodman, Allen C. & Kawai, Masahiro, 1982. "Permanent income, hedonic prices, and demand for housing: New evidence," Journal of Urban Economics, Elsevier, vol. 12(2), pages 214-237, September.
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