Alternate Author Name(s)

Clifford R. Kern

Document Type

Dissertation

Date of Award

1973

Keywords

Housing, Mathematical models, Farmhouses, Research

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Jung Chao Liu

Second Advisor

Alphonse G. Holtmann

Abstract

In this study, an attempt is made to identify the sources of bias in the estimates of the elasticities of housing demand and estimate the demand functions for housing with emphasis on the problem of identification. The main finding of this study is that the permanent income elasticity of housing demand is about 0.3 and the price elasticity of housing demand is about 0.35. The study is composed of static analysis and dynamic and analysis. On the contrary to relative abundance of static analyses, there have been very few dynamic studies. Furthermore, the distributed lag model which has been commonly adopted in the dynamic studies of housing demand is, as Zvi Griliches puts it, a "theoretical ad-hockery." To give a theoretical underpinning to a dynamic model of housing demand, a neoclassical theory of optimal accumulation of housing stock is developed along the line of Dale Jorgenson's theory of investment. The demand function for the optimal housing stock thus generated is only a part of the forces that determine what happens in the housing market. From the analysis of the housing market equilibrium, a. new type of distributed lag model is generated and empirical test of the model is performed.

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