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A Regional Model of Multifamily Housing Starts
Author(s) -
Rosen Kenneth T.
Publication year - 1979
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00195
Subject(s) - profitability index , economics , census , econometrics , variance (accounting) , profit (economics) , microeconomics , finance , sociology , population , demography , accounting
This paper presents a regional time series model of multifamily housing activity. The theoretical model, based on a profit‐maximizing builder or investor is used as a basis for estimating housing start and completion equations for each of the four Census regions and the U.S. as a whole. The empirical estimates show that new housing construction is highly responsive to profitability consideration, with the elasticity being between 5 and 14. The empirical estimates also demonstrate that there is substantial variance between regions in terms of parameter estimates.