Open AccessInternational Real Estate Review
Author(s) -
Chu-Chia Lin,
AUTHOR_ID,
Sue-Jing Lin,
AUTHOR_ID
Publication year - 1999
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100015
Subject(s) - renting , consumption (sociology) , real estate , investment (military) , economics , house price , income elasticity of demand , elasticity (physics) , order (exchange) , labour economics , microeconomics , business , monetary economics , finance , social science , materials science , sociology , politics , political science , law , composite material
Buying a house usually satisfies housing consumption demand and housing investment demand, simultaneously. In order to disentangle the above two types of demand, households, in this study, are separated into three subtenure groups i.e. renters, owners owning one house, and owners buying a second or more houses. Presumably, renting a house is for consumption only, while buying a second house is usually for investment purposes. Applying a two-period model and two data sets from DGBAS and from Land Bank of Taiwan, the estimated results are as follows: Firstly, the income elasticity of pure consumption demand for housing is very close to unity (1.0413). Secondly, the income elasticity for a pure investment demand is greater than one (1.2643). Finally, for a household owning only one house, the shares for consumption motive and for investment motive are 26% and 74%, respectively.