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The Elasticity of Capital - Land Substitution in the Housing Construction Sector of a Rapidly Urbanized City: Case Study of Ankara

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Listed:
  • Isil Erol
  • Guzel Alper

Abstract

The purpose of this paper is to estimate the elasticity of capital - land substitution in the housing construction sector of Ankara, which is the capital city of Turkey and a rapidly urbanized city. The theoretical basis of our study is the housing production models, which use the basic concept of elasticity of substitution between land and non-land factors in order to explain the land-use pattern of cities. Using a variable elasticity of substitution (VES) production function and cross-section data, the paper provides new information to compare the long term housing supply elasticity of Ankara with that of the US and the UK cases. Elasticity of capital Ò land substitution for Ankara (from 0.49 to 0.95) is found to be similar to that of American empirical studies, which range from 0.5 to 1.13 and it is more elastic than the UK case studies of the Bristol (0.18) and Cambridge (0.23) housing markets. The paper also discusses the spatial differentiation of elasticity of substitution within the city in order to explain the spatial structure of the housing market in the long run.

Suggested Citation

  • Isil Erol & Guzel Alper, 2003. "The Elasticity of Capital - Land Substitution in the Housing Construction Sector of a Rapidly Urbanized City: Case Study of Ankara," ERES eres2003_150, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2003_150
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2003-150
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    Cited by:

    1. Chengri DING & Yi NIU, 2016. "Which is Driver? Land Price or Housing Price: Examining the Urban Spatial Structure of Beijing," Chinese Journal of Urban and Environmental Studies (CJUES), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 1-13, September.
    2. Nicholas Boamah, 2015. "The impact of households characteristics on the state of housing in the Offinso South Municipality (OSM), Ghana," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(6), pages 1251-1266, December.

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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