Housing Demand in Canada, 1947 to 1962: Some Preliminary Experimentation

In: Canadian journal of economics and political science: the journal of the Canadian Political Science Association = Revue canadienne d'économique et de science politique, Band 32, Heft 3, S. 302-318

Abstract

The paucity of econometric analyses of the demand for consumer durables stands in sharp contrast to the number of studies involving the demand for non-durables, and for agricultural commodities in particular. The neglect of durables undoubtedly reflects in part the greater difficulty of obtaining the necessary data, especially data on stocks, and in part the heterogeneity of most durables, such as houses or automobiles. Econometric analysis in the post-war period has also been centred around the construction of large-scale macro-economic models. Until rather recently, however, such models were relatively highly aggregated, and seldom involved examination of particular durables markets by themselves. Moreover, where an equation for the housing market has been included, it has often been a hybrid of supply and demand forces, intended to serve in a "forecasting" role, presumably in the hope that appreciable structural change would not occur during the forecast period.The present study will, it is hoped, cast some light on the controversy generated in the United States over the size of demand elasticities for housing with respect to income. The results of the econometric techniques employed here may also assist in evaluating the appropriateness of alternative estimating techniques for the study of demand for durables.An econometric analysis of the demand for housing immediately raises two questions. First, is it a flow or a stock demand that is to be analysed? Here it is the demand for a long-run equilibrium stock, the "desired stock" of housing, that is the focus of concern.