Fundamental and Speculative Demands for Housing
Author/Editor:
Publication Date:
March 19, 2019
Electronic Access:
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Summary:
This paper separates the roles of demand for housing services and belief about future house prices in a house price cycle, by utilizing a feature of user-cost-of-housing that it is sensitive to demand for housing services only. Optimality conditions of producing housing services determine user-cost-of-housing and the elasticity of substitution between land and structures in producing housing services. I find that the impact of demand for housing services on house prices is amplified by a small elasticity of substitution, and demand explained four fifths of the U.S. house price boom in the 2000s.
Series:
Working Paper No. 19/63
English
Publication Date:
March 19, 2019
ISBN/ISSN:
9781498302722/1018-5941
Stock No:
WPIEA2019063
Price:
$18.00 (Academic Rate:$18.00)
Format:
Paper
Pages:
54
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