Housing investment in Finland

Kari Takala and Matti Tuomala
Additional contact information
Kari Takala: University of Helsinki

Finnish Economic Papers, 1990, vol. 3, issue 1, 41-53

Abstract: The high volatility of both housing investment and housing prices has raised questions about the determinants of housing investment in Finland. In this paper we estimate investment equations for the period 1972 -1987. The exceptional durability of houses makes housing investment sensitive to interest rates as well as to changes in the liquidity constraints due to money market liberalization during the 1980's. Here, we confirm the applicability of Tobin's q theory of investment as an explanation for housing investment. Therefore housing investment can be successfully and sufficiently explained with the ratio of nominal housing prices to their construction costs. However, we observed structural changes in the model of housing investment and the q theory gives a better description for supply of houses in the latter half of the estimation period 1980-87.

Date: 1990
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://taloustieteellinenyhdistys.fi/images/stories/fep/f1990_1d.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:fep:journl:v:3:y:1990:i:1:p:41-53

Access Statistics for this article

More articles in Finnish Economic Papers from Finnish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Editorial Secretary ( this e-mail address is bad, please contact ).