Hedonic and GMM Estimates of the Relationship between House Prices and Rents in Taiwan

Chieh-hsuan Wang (), Chien-ping Chung () and Jen-Te Hwang ()
Additional contact information
Chieh-hsuan Wang: Department of Economics, National Chengchi University, Taiwan
Chien-ping Chung: Department of International Business, Shih Chien University, Taiwan
Jen-Te Hwang: Department of Banking and Finance, Kainan University, Taiwan

Economics Bulletin, 2012, vol. 32, issue 3, 2231-2245

Abstract: Empirical results in this study demonstrate that house prices have limited influence over rents in Taiwan. In fact, the impact of house prices on rents is not as apparent as of other factors like the floor (high or low), area, and the interaction of multiple factors such as house attributes like traffic accessibility. This means that the correlation between house prices and rents is not as direct and close as theories or experience would suggest. The findings also imply that a direct causal relationship does not exist between rents and house prices. Apart from reflecting the phenomenon of the price disconnect, the difference between owner-occupied dwellings market and rental market could have also resulted from various factors such as affordability, relevant government policies, and the traditional association of land ownership with wealth. As a result, demographics of house renters have been separated from those of house owners, meaning that households make their tenure choices differently; those who remain in the rental market over the long run are usually the disadvantaged minorities, who can resolve their needs for shelter only through house rentals.

Keywords: rent multiplier; tenure choice; hedonic price function; GMM model (search for similar items in EconPapers)
JEL-codes: C2 R2 (search for similar items in EconPapers)
Date: 2012-08-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I3-P216.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-11-00571

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().