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Estimating the demand for housing, land, and neighbourhood characteristics

Cheshire, Paul and Sheppard, Stephen (1998) Estimating the demand for housing, land, and neighbourhood characteristics. Oxford Bulletin of Economics and Statistics, 60 (3). pp. 357-382. ISSN 0305-9049

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Abstract

This paper provides estimates of the structure of demand for individual housing and neighbourhood characteristics and for land in two British cities. We estimate a hedonic price function, and from this obtain the implicit prices of house attributes. These prices are used to estimate a demand system for each city. These perform well, and enable us to calculate price and income elasticities for each of the non-dichotomous characteristics and for land. To counteract criticisms of demand estimates derived within the hedonic framework a method is developed for selecting an appropriate set of instrumental variables. Estimates derived from this method, however, differ only slightly from those obtained using the conventional techniques. Several features of these estimates provide insights into the unusual characteristics of the British housing market, the effects of constraints imposed by land use planning, and the effects of changing income distribution on the structure of demand.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 1998 Blackwell Publishers Ltd
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Sets: Departments > European Institute
Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 13 Aug 2013 14:36
URL: http://eprints.lse.ac.uk/51681/

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