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Cost of Waiting, Risk, and Individual Action: The Case of Public Housing

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  • K G Willis

    (Department of Town and Country Planning, University of Newcastle upon Tyne, Newcastle upon Tyne NE1 7RU, England)

Abstract

In this paper the concept of waiting time for public housing is explored; the individual's decisionmaking process on whether to join the housing queue is modeled; how long he/she is prepared to wait for public housing is assessed; a methodology to evaluate the cost of this waiting time is proposed; and estimates of some likely values of this cost are made. The cost of waiting is of more than esoteric interest, impinging on several questions of policy, such as the use of waiting times as indicators in assessing need, the sale of council housing, and the efficiency of a nonprice method of resource allocation. The model predicts the maximum length of time a person will be prepared to wait, given his/her life expectancy in the authority's house, the relative cost to the person of alternative housing, and his/her time-preference rate. Risk preferences are also incorporated to assess the ‘risk premium’: The extra cost a person would sacrifice to be certain of obtaining public housing at a specified time. Estimates of the cost of waiting are derived from the model and also from a questionnaire survey of housing waiting-list applicants in North Tyneside Metropolitan Borough.

Suggested Citation

  • K G Willis, 1984. "Cost of Waiting, Risk, and Individual Action: The Case of Public Housing," Environment and Planning C, , vol. 2(3), pages 307-324, September.
    • Handle: RePEc:sae:envirc:v:2:y:1984:i:3:p:307-324
    DOI: 10.1068/c020307
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    References listed on IDEAS

    as
    1. King, Mervyn A., 1980. "An econometric model of tenure choice and demand for housing as a joint decision," Journal of Public Economics, Elsevier, vol. 14(2), pages 137-159, October.
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    4. Martin Ricketts, 1982. "A politico-financial model of local authority rents and rate fund contributions in the U.K," Public Choice, Springer, vol. 39(3), pages 399-414, January.
    5. Mervyn A. King, 1980. "An Econometric Model of Tenure Choice and Demand for Housing as a Joint Decision," NBER Chapters, in: Econometric Studies in Public Finance, pages 137-159, National Bureau of Economic Research, Inc.
    6. J.S. Foreman-Peck, 1982. "The Appraisal of Sales of Local Authority Rented Accommodation: a Comment," Urban Studies, Urban Studies Journal Limited, vol. 19(1), pages 79-82, February.
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