Analysis of the Determinants of New Housing Investment in Spain
Titel:
Analysis of the Determinants of New Housing Investment in Spain
Auteur:
Neto, Melchior Sawaya
Verschenen in:
Housing, theory and society
Paginering:
Jaargang 22 (2005) nr. 1 pagina's 18-31
Jaar:
2005-04
Inhoud:
Correct specification of housing supply function has been a subject of intense research by economists over the last few decades. However, there is no consensus about how this function should be formalized. The challenge lies in the configuration of the time structure of investment and in the adoption of proper explanatory variables. This study tests some important assumptions about how the producer's expectations of the profitability of a project are formed, using a model that characterizes the construction period. The empirical literature on housing supply has not given a significant role to production-side variables, such as labour, raw materials and land costs, in estimated specifications, contradicting the neo-classical theory, which gives great importance to these variables. Thus, a further aim of this study is to analyse whether production-side variables play an important role in the Spanish situation.
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