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The demand for housing services in the Netherlands

  • Edwin Van Gameren


  • Michiel Ras


  • Evelien Eggink


  • Ingrid Ooms


We investigate the effect of subsidies and levies on the behaviour of households on the Dutch housing market. Our primary interest lies in the effect on the tenure choice and on the levels of housing consumption for the whole population. The housing consumption level is not a priori defined. We chose a one-dimensional housing concept. Differences between market values may reflect differences in house characteristics, but may also stem from differences between markets. To find the ‘true’ levels of housing, we break up market values of houses into price and quantity, resulting in regional price indices for owner-occupied and rented houses separately. After correction for actual subsidies and levies (for the current tenure choice) and for imputed values (for the alternative choice), households face individually varying prices. We use a survey data set of about 60,000 Dutch households. Behaviour is estimated using a utility maximising consumption model with equations for both tenure choice and the consumption levels for owning respectively renting a house. The relation between choice and quantity is taken into account. The resulting price and income effects are in line with standard theory. Higher income gives a tendency towards owning rather than renting.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p327.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p327
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  1. Ermisch, J. F. & Findlay, J. & Gibb, K., 1996. "The Price Elasticity of Housing Demand in Britain: Issues of Sample Selection," Journal of Housing Economics, Elsevier, vol. 5(1), pages 64-86, March.
  2. 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.
  3. Lee, Lung-Fei & Trost, Robert P., 1978. "Estimation of some limited dependent variable models with application to housing demand," Journal of Econometrics, Elsevier, vol. 8(3), pages 357-382, December.
  4. Rouwendal, Jan, 1998. "On Housing Services," Journal of Housing Economics, Elsevier, vol. 7(3), pages 218-242, September.
  5. Zabel, Jeffrey E., 2004. "The demand for housing services," Journal of Housing Economics, Elsevier, vol. 13(1), pages 16-35, March.
  6. Olsen, Edgar O., 1987. "The demand and supply of housing service: A critical survey of the empirical literature," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 25, pages 989-1022 Elsevier.
  7. Smith, Lawrence B & Rosen, Kenneth T & Fallis, George, 1988. "Recent Developments in Economic Models of Housing Markets," Journal of Economic Literature, American Economic Association, vol. 26(1), pages 29-64, March.
  8. Charlier, E. & Melenberg, B. & van Soest, A.H.O., 1997. "An Analysis of Housing Expenditure Using Semiparametric Cross-Section Models," Discussion Paper 1997-15, Tilburg University, Center for Economic Research.
  9. Harvey S. Rosen, 1983. "Housing Subsidies: Effects on Housing Decisions, Efficiency, and Equity," NBER Working Papers 1161, National Bureau of Economic Research, Inc.
  10. Rapaport, Carol, 1997. "Housing Demand and Community Choice: An Empirical Analysis," Journal of Urban Economics, Elsevier, vol. 42(2), pages 243-260, September.
  11. Harry ter Rele & G. van Steen, 2001. "Housing subsidisation in the Netherlands; measuring its distortionary and distributional effects," CPB Discussion Paper 2, CPB Netherlands Bureau for Economic Policy Analysis.
  12. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
  13. repec:cup:cbooks:9780521801669 is not listed on IDEAS
  14. 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.
  15. Manuel Jaen & Agustin Molina, 1994. "Un análisis empírico de la tenencia y demanda de vivienda en Andalucía," Investigaciones Economicas, Fundación SEPI, vol. 18(1), pages 143-164, January.
  16. repec:cup:cbooks:9780521143653 is not listed on IDEAS
  17. Goodman, Allen C., 1988. "An econometric model of housing price, permanent income, tenure choice, and housing demand," Journal of Urban Economics, Elsevier, vol. 23(3), pages 327-353, May.
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