An Estimation of Long-Term Housing Demand in North Korea Based on Mankiw-Weil Model

Jooyung Lee ()
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Jooyung Lee: Bank of Korea (CERDI)

Journal of Economic Development, 2019, vol. 44, issue 4, 68-133

Abstract: This paper estimates long-term housing demand and the related housing construction investment in North Korea. First, demographically-driven housing demand is estimated based on the Mankiw-Weil model. We then calculate the demographics-driven aggregate housing demand in North Korea. According to these estimates, the pace of increase in demographically-driven housing demand shows a gradual slowdown, from an annual average of 0.61% to 0.88% between 2001 and 2020, to 0.29% between 2021 and 2030. This paper next forecasts housing demand in North Korea based on the assumption that the country will pursue external openness on a full scale from 2021, and that this will lead to a considerable growth in income. If external openness leads to increases in individual demand, then an additional 0.37%p (in the slight increase scenario) to 1.58%p (in the sharp increase scenario) in the annual rate of growth in total housing demand is likely, compared to the baseline scenario.

Keywords: Demographically-Driven Housing Demand; Mankiw-Weil Model; External Openness; Housing Construction Investment (search for similar items in EconPapers)
JEL-codes: E01 E17 J10 R21 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:44:y:2019:i:4:p:98-133

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