The Demand for Housing
In this chapter we shall concentrate on empirical studies of demand that have sought to identify the quantitative relationship between housing demand and its various determinants. These studies are of considerable practical importance because they provide the basis for forecasts of future housing requirements. As such, their approaches often differ according to whether they are designed to deal with short-run changes or the long-term future. If it is the short run that is of immediate concern, a study will usually tend to concentrate upon economic determinants of demand such as income, price and credit terms, assigning only a subsidiary role to socio-demographic factors. This emphasis is appropriate because it can usually be assumed that demographic factors will remain unchanged in the short run. Thus it is the impact of changes in income tax, credit availability, or of rent supplement schemes upon the existing population’s housing demand which is of immediate interest to the Government’s short-term policy advisers. In the long-term, however, the socio-demographic factors become important; indeed, they are often considered more important and predictable than most economic variables.
KeywordsIncome Elasticity Current Income Permanent Income Housing Demand Building Society
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