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1973•The Review of Economics and StatisticsRequires access

Income Elasticity of Housing Demand

Geoffrey Carliner

Open publisher page 134 citations

Abstract

This paper estimates a housing demand function from a four year panel study.The findings indicate that the income elasticity of housing demand is around .6 or .7 for owners and around .5 for renters.This means that the percentage of income spent on housing declines as income rises, and that the property tax falls more heavily on the poor than on the rich.This finding differs from earlier studies which were based on city averages rather than panel studies, and is therefore more reliable.The study also found that, other things equal, the old demand more housing than the young, whites more than nonwhites, and female headed households more than male headed households.

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What this paper is about

This paper estimates a housing demand function from a four year panel study.The findings indicate that the income elasticity of housing demand is around .6 or .7 for owners and around .5 for renters.This means that the percentage of income spent on housing declines as income rises, and that the property tax falls more heavily on the poor than on the rich.This finding differs from earlier studies which were based on city averages rather than panel studies, and is therefore more reliable.The study also found that, other things equal, the old demand more housing than the young, whites more than nonwhites, and female headed households more than male headed households.

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Available abstract

This paper estimates a housing demand function from a four year panel study.The findings indicate that the income elasticity of housing demand is around .6 or .7 for owners and around .5 for renters.This means that the percentage of income spent on housing declines as income rises, and that the property tax falls more heavily on the poor than on the rich.This finding differs from earlier studies which were based on city averages rather than panel studies, and is therefore more reliable.The study also found that, other things equal, the old demand more housing than the young, whites more than nonwhites, and female headed households more than male headed households.

Key concepts: Income elasticity of demand, Economics, Elasticity (physics), Price elasticity of demand, Wealth elasticity of demand, Labour economics, Microeconomics, Physics

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