 The production function for housing: evidence from FrancePierre-Philippe Combes, Gilles Duranton and Laurent Gobillon No 2017/07, Working Papers from Institut d'Economia de Barcelona (IEB) Abstract: We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on the firstorder condition for profit maximisation with respect to nonland inputs by competitive house builders. For parcels of a given size, we compute housing by summing across the marginal products of nonland inputs. Differences in nonland inputs are caused by differences in land prices that reflect differences in the demand for housing across locations. We implement our methodology on newlybuilt singlefamily homes in France. We find that the production function for housing is reasonably well, though not perfectly, approximated by a CobbDouglas function and close to constant returns after correcting for differences in user costs between land and nonland inputs and taking care of some estimation concerns. We estimate an elasticity of housing production with respect to nonland inputs of about 0.80. Keywords: Housing; production function (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2017-07 Access Statistics for this paper More papers in Working Papers from Institut d'Economia de Barcelona (IEB) Contact information at EDIRC. |
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