Full Citation

Title: Housing Supply Is Inelastic Where Location Matters

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: This paper offers a simple explanation for differences in home price growth across metropolitan areas over the past three decades. Supply is least elastic, and price appreciation potentially greatest, in metropolitan areas where available land is in worse locations than existing housing. Across US metropolitan areas, home price appreciation between 1980 and 2008 is highly correlated with the within-metropolitan relationship between age of housing stock and land rents, as measured by either hotel room prices in 2008 or apartment rents in 1980. The relationship between this land rent gradient and home price appreciation is stronger where predicted employment growth based on1980 SIC code shares is greater.

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Authors: Davidoff, Thomas

Publisher: University of California, Berkeley

Data Collections: IPUMS USA

Topics: Housing and Segregation

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