Estimating the consumption and investment demands for housing and their effect on housing tenure status

Y. M. Ioannides, S. S. Rosenthal

Research output: Contribution to journalArticle

78 Scopus citations

Abstract

Theoretical work suggests that families live in owner-occupied housing if their investment demand for housing exceeds their consumption demand for housing. Using household data from the 1983 Survey of Consumer Finances, we test this theory by estimating an ordered probit model of whether families rent without owning property, rent while owning property other than their home, own their home without owning other properties, or own their home in addition to other properties. For owner-occupiers who own additional property, both the investment and consumption demands are directly observed enabling us to separately identify these functions. Results suggest that investment demand is more sensitive to wealth and income than is consumption demand, but that consumption demand is more sensitive to demographic variables and proximity to urban suburbs. -from Authors

Original languageEnglish (US)
Pages (from-to)127-141
Number of pages15
JournalReview of Economics & Statistics
Volume76
Issue number1
DOIs
StatePublished - Jan 1 1994
Externally publishedYes

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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