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THE ROLE OF INFRASTRUCTURE IN THE SUPPLY OF HOUSING *
Author(s) -
Stover Mark Edward
Publication year - 1987
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1987.tb01158.x
Subject(s) - stock (firearms) , land price , business , price elasticity of supply , production (economics) , economics , supply and demand , land values , scale (ratio) , natural resource economics , price elasticity of demand , agricultural economics , microeconomics , land use , finance , geography , civil engineering , cartography , archaeology , engineering
As the housing stock in a city is duplicated, developers must devote greater amounts of resources to the provision of infrastructure. If the production of infrastructure is characterized by decreasing returns to scale, this will cause the price of developable land to increase. The conditions under which an upward‐sloping supply curve for housing will result are discussed. Using cross‐sectional data for U.S. cities from 1973 to 1982, it is shown that land prices fail to increase with the quantity of construction and that the price elasticity of the supply of housing is infinite.