An Estimation of Elasticities of Consumption Demand and Investment Demand for Owner-Occupied Housing in Taiwan: A Two-Period Model

Chu-Chia Lin () and Sue-Jing Lin ()
Additional contact information
Chu-Chia Lin: Department of Economics, National Chengchi University, Taipei, Taiwan, http://www.nccu.edu.tw
Sue-Jing Lin: Department of International Trade, Lung-Hwa Institute of Technology, Taoyuan, Taiwan

International Real Estate Review, 1999, vol. 2, issue 1, 110-125

Abstract: Buying a house usually satisfies housing consumption demand and housing investment demand, simultaneously. In order to disentangle the above two types of demand, households, in this study, are separated into three subtenure groups i.e. renters, owners owning one house, and owners buying a second or more houses. Presumably, renting a house is for consumption only, while buying a second house is usually for investment purposes. Applying a two-period model and two data sets from DGBAS and from Land Bank of Taiwan, the estimated results are as follows: Firstly, the income elasticity of pure consumption demand for housing is very close to unity (1.0413). Secondly, the income elasticity for a pure investment demand is greater than one (1.2643). Finally, for a household owning only one house, the shares for consumption motive and for investment motive are 26% and 74%, respectively.

Keywords: Consumption demand; investment demand; elasticity and housing; Taiwan (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.gssinst.org/irer/wp-content/uploads/20 ... -1-An-Estimation.pdf Full text (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:ire:issued:v:02:n:01:1999:p:110-125

Ordering information: This journal article can be ordered from
Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850
https://www.gssinst.org/gssinst/index.html

Access Statistics for this article

International Real Estate Review is currently edited by Professor Sing Tien Foo and Professor Ko Wang

More articles in International Real Estate Review from Global Social Science Institute Global Social Science Institute, 9200 Corporate Blvd., Suite 420 Rockville, MD 20850.
Bibliographic data for series maintained by IRER Graduate Assistant/Webmaster ().