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New Zealand's 'love affair' with houses and cars

Author

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  • Mohammed Khaled
  • Ralph Lattimore

Abstract

Rapidly rising house prices over the last few years has drawn the attention of researchers to the drivers lying behind both supply and demand side influences in the housing market. This study complements much of that work by attempting to uncover the price and income parameters for rental and owner-occupied housing in New Zealand in relation to all other goods and services purchased by households. The research quantifies a point long understood informally about demand behaviour in this country, that the demand for housing (and cars) is particularly income elastic. This has important implications for policy makers who attempt to constrain speculative housing demand. Another notable feature of the period has been an apparent trend away from owner occupied housing towards rental accommodation. The research is carried out using Household Economic Survey data through 2004.

Suggested Citation

  • Mohammed Khaled & Ralph Lattimore, 2008. "New Zealand's 'love affair' with houses and cars," New Zealand Economic Papers, Taylor & Francis Journals, vol. 42(1), pages 127-148.
    • Handle: RePEc:taf:nzecpp:v:42:y:2008:i:1:p:127-148
    DOI: 10.1080/00779950809544416
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    References listed on IDEAS

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    1. Capps Jr., Oral & Church, Jeffrey & Alan Love, H., 2003. "Specification issues and confidence intervals in unilateral price effects analysis," Journal of Econometrics, Elsevier, vol. 113(1), pages 3-31, March.
    2. Keller, W.J. & Van Driel, J., 1985. "Differential consumer demand systems," European Economic Review, Elsevier, vol. 27(3), pages 375-390.
    3. Isabelle Joumard & Helmut Reisen, 1992. "Real Exchange Rate Overshooting and Persistent Trade Effects: The Case of New Zealand," The World Economy, Wiley Blackwell, vol. 15(3), pages 375-388, May.
    4. Claudio Michelini, 1999. "New Zealand household consumption patterns 1983-1992: An application of the almost-ideal-demand-system," New Zealand Economic Papers, Taylor & Francis Journals, vol. 33(2), pages 15-26.
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    Cited by:

    1. Corey Allan & Suzi Kerr & Campbell Will, 2015. "Are we turning a brighter shade of green? The relationship between household characteristics and greenhouse gas emissions from consumption in New Zealand," Working Papers 15_06, Motu Economic and Public Policy Research.
    2. Ralph G. Lattimore, 2019. "The Composition of New Zealand Exports 1989-2018," Working Papers in Economics 19/10, University of Waikato.
    3. Thomas, Alastair, 2019. "Who Would Win from a Multi-rate GST in New Zealand: Evidence from a QUAIDS Model," Working Paper Series 8127, Victoria University of Wellington, Chair in Public Finance.

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