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Tweaking the DiPasquale–Wheaton–Colwell model

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  • Gaetano Lisi

    (e-Campus University)

Abstract

The so-called “four-quadrant” model (DiPasquale and Wheaton in R Estate Econ 20(1):181–197, 1992) is probably the most popular and most studied model of long-run equilibrium in aggregate housing markets. Nevertheless, it has some drawbacks. Colwell (J Hous Econ 11(1):24–39, 2002), therefore, adds new devices to the model (referred to as “tweaks”) to remove several important drawbacks. However, also the modified version of the “four-quadrant” model neglects a very important feature of housing markets: the search-and-matching process. Hence, we add to the DiPasquale–Wheaton–Colwell model the key features of this (time-consuming) process. This theoretical integration is relatively simple but economically profound, since the model is now characterised by a decentralised and uncoordinated equilibrium.

Suggested Citation

  • Gaetano Lisi, 2020. "Tweaking the DiPasquale–Wheaton–Colwell model," Letters in Spatial and Resource Sciences, Springer, vol. 13(2), pages 201-208, August.
    • Handle: RePEc:spr:lsprsc:v:13:y:2020:i:2:d:10.1007_s12076-020-00253-2
    DOI: 10.1007/s12076-020-00253-2
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    References listed on IDEAS

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    1. Genesove, David & Han, Lu, 2012. "Search and matching in the housing market," Journal of Urban Economics, Elsevier, vol. 72(1), pages 31-45.
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    4. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
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    6. Denise DiPasquale & William C. Wheaton, 1992. "The Markets for Real Estate Assets and Space: A Conceptual Framework," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(2), pages 181-198, June.
    7. Guillaume Rocheteau & Pierre-Olivier Weill, 2011. "Liquidity in Frictional Asset Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 261-282, October.
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    More about this item

    Keywords

    Housing markets; Real estate economics; Search and matching frictions;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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