Demographic Factors and the Demand for Housing in the Helsinki Metropolitan Area
AbstractWe examine the role of demographics on the housing market in the Helsinki Metropolitan Area (HMA) using the Mankiw and Weil (1989) approach. First, we estimate housing demand for each age group in HMA using cross section data and find that it increases from childhood to the age 70-74 years. This profile differs from those estimated for the US and Sweden. Next, we construct time series data of housing consumption and demographic housing demand for HMA in 1962-97. In the latter, we use population statistics and the results of our cross section analysis. We also estimate a housing price model, but our main interest is in housing demand which is explained by demographic demand, real income, user costs of housing and unemployment rate in HMA. One percent increase in demographic demand leads to almost one percent growth in total housing demand. Our income elasticity is quite low, about 0.1. Finally, our cross section and time series results, together with population prognoses, are used in forecasting housing demand in HMA for the years 1997-2015.
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Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 191.
Date of creation: 01 Jan 1999
Date of revision:
Find related papers by JEL classification:
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
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