Economics at your fingertips  

Estimating the elasticity of supply of housing space rather than units

Yishen Liu ()

Regional Science and Urban Economics, 2018, vol. 68, issue C, 1-10

Abstract: Microeconomic theory suggests that consumers do not consume and suppliers do not supply housing units. Housing units are an artifact of the way in which individuals cluster in residential real estate. The most fundamental measure of willingness to pay on the part of consumers and cost of production experienced by producers is interior space. Empirical literature on housing supply in cities has been based on counts of housing units primarily because counts of units are readily available, across time and space. This paper shows how to produce estimates of aggregate square feet of housing. A theory section then demonstrates that measuring supply elasticities using counts of units are biased downward compared to results using interior space. Finally empirical tests confirm the theoretical evidence that housing supply estimates based on counts of units are too small.

Keywords: Housing supply elasticity; Housing space; Spatial equilibrium (search for similar items in EconPapers)
JEL-codes: R10 R21 R31 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

DOI: 10.1016/j.regsciurbeco.2017.10.013

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2022-04-28
Handle: RePEc:eee:regeco:v:68:y:2018:i:c:p:1-10