 The Production Function for Housing: Evidence from FrancePierre-Philippe Combes, Gilles Duranton and Laurent Gobillon Journal of Political Economy, 2021, vol. 129, issue 10, 2766 - 2816 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 a first-order condition for profit maximization combined with a zero-profit condition. More desirable locations command higher land prices and, in turn, more capital to build houses. For parcels of a given size, we compute housing production by summing across the marginal products of capital. For newly built single-family homes in France, the production function for housing is close to constant returns and is well, though not perfectly, approximated by a Cobb-Douglas function with a capital elasticity of 0.65. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:doi:10.1086/715076 Access Statistics for this article More articles in Journal of Political Economy from University of Chicago Press |
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