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UNCERTAIN INCOME AND HOUSING PRICE AND LOCATION CHOICE *
Author(s) -
Turnbull Geoffrey K.,
Glascock John L.,
Sirmans C. F.
Publication year - 1991
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.1467-9787.1991.tb00158.x
Subject(s) - economics , microeconomics , consumption (sociology) , affect (linguistics) , house price , econometrics , social science , linguistics , philosophy , sociology
. In this paper, we adapt recent developments in uncertainty modeling to the location choice paradigm. In particular, we analyze the impact of income and housing price uncertainty on housing demand and location demand characteristics in a partial equilibrium framework. We begin by recognizing that housing consumption cannot readily be altered in response to changes in income and price. We find that income and house price risk affect housing and location demands in different ways. Additionally, the spatial characteristics of price risk also affect consumer housing and location demands. For example, if housing price risk is lower farther from the central city, housing demand can be greater in those locations even with the higher transportation cost. Thus, over some locations, the expected price gradient could be positive.