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Parker Wheatley


This research paper estimates the demand for housing services across the United States and studies public policy implications based on estimation results. More specifically, the research paper examines the price and income elasticity of demand in the United States and tests for structural change in the demand for housing services between two different time periods. The empirical analysis on 33 Metropolitan Statistical Areas in 2005 and 2011 suggests that the demand for housing services is inelastic with respect to price per unit of housing services, and the income elasticity of demand has a relatively larger magnitude than the price elasticity of demand. In addition, there is a structural change in the demand for housing services between 2005 and 2011. Finally, the parameters estimated from the housing demand model are used to perform a preliminary policy analysis of households’ response to a housing allowance program. The estimated housing demand equation allows the assessment of the impact of housing allowance programs on the price of housing services and thus, may help policy makers to ensure adequate housing stock in an area.


Readers: Shrawantee Saha, Margaret Lewis, John Olson

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