Modelling the supply of new residential construction for local housing markets and estimation of housing supply price elasticities: The case of Aberdeen, UK.
||Modelling the supply of new residential construction for local housing markets and estimation of housing supply price elasticities: The case of Aberdeen, UK.
||19th Annual European Real Estate Society Conference in Edinburgh, Scotland
||Housing investment affects economic growth both directly and indirectly and so understanding the mechanisms underlying the housing is of great importance. However, the demand side of the housing market is much better understood than the supply side and even relatively simple questions regarding the price elasticity of housing supply produce wide range of estimates. Also, most of the housing supply studies are conducted at the national and regional levels even though the advantages of conducting such studies at the local level are well known among researchers. This paper employs several model specifications to estimate the supply of housing for the Aberdeen housing market in the UK. Like most of the UK studies, the price elasticities are relatively low as compared to those from the US studies. The paper recommends more local housing market studies to be conducted to better understand the supply of housing at the local (district) levels. Also, firm level data would offer the opportunity for the underlying builder behaviour to be tested explicitly.
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||PhD Session 2A
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