IDEAS home Printed from https://ideas.repec.org/a/aea/aejpol/v10y2018i4p243-67.html
   My bibliography  Save this article

A Dynamic Model of Housing Supply

Author

Listed:
  • Alvin Murphy

Abstract

This paper estimates a dynamic microeconometric model of housing supply. The model features forward-looking landowners who optimally choose both the timing and the nature of construction while taking into account expectations about future prices and costs. The model is estimated using a unique dataset describing individual landowners in the San Francisco Bay Area. Results indicate that geographic and time-series variation in costs are key to understanding where and when construction occurs. Pro-cyclical costs provide an incentive for some landowners to build before price peaks. Results also indicate that landowners actively "time" the market, which reduces the elasticity of supply.

Suggested Citation

  • Alvin Murphy, 2018. "A Dynamic Model of Housing Supply," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 243-267, November.
    • Handle: RePEc:aea:aejpol:v:10:y:2018:i:4:p:243-67
    Note: DOI: 10.1257/pol.20150297
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/pol.20150297
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=ZTVIIrq3sXDdCj66jNk_Hi3VFDNJCuFR
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=hUaQvYpselCbDHb1ZDGG7T_Oy86v0OmV
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=Jttk02x2_zlOK37a9B4SR8xBL4Ltwsf1
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    More about this item

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejpol:v:10:y:2018:i:4:p:243-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.