A forward-looking model of housing construction in the UK

Christopher Tsoukis () and Peter Westaway ()

No 13, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: This paper identifies and juxtaposes different approaches to modelIing housing construction. The first two are based on dynamic marginal pricing considerations and emphasise adjustment costs and the necessary time to build, respectively. Importantly, both these models introduce some degree of forward-looking behaviour into the housebuilding decision. Both approaches are able to explain aspects of UK housing starts, 1970-90. Non-nested testing showed that the time-to-build story is more powerful in explaining the data set at hand. However, we have not been able to find any evidence in support of a third hypothesis, namely that quantity signals, proxied by turnover in the housing market, influence starts. The start to completion lag, in turn, is found to be affected by the interest rate representing the opportunity cost of delayed completions.

Date: 1992-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.niesr.ac.uk/wp-content/uploads/1992/05/DP13.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:nsr:niesrd:13

Access Statistics for this paper

More papers in National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC.
Bibliographic data for series maintained by Library & Information Manager ().