IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v18y2000i3p345-358.html
   My bibliography  Save this article

The economic impact of reducing on‐base naval housing

Author

Listed:
  • P. Bernstein
  • G. Tolley

Abstract

This article develops a methodology for estimating the impact on rents and home prices from a hypothetical reduction of on‐base naval housing from 56 naval bases in the United States. Based on data from the Center for Naval Analyses and the U.S. Census of Housing, and response coefficients from housing economics literature, illustrative estimates are presented of the short‐run and long‐run and long‐run impact of reducing naval housing. Key factors determining the increase in rents and home prices include (1) the increase in demand for housing in the private sector resulting from the reduction of on‐base naval housing, (2) the short‐run and long‐run elasticities of supply of private sector housing with respect to housing prices, and (3) the elasticity of demand to live in a defined housing area with respect to housing prices. We find that the effects on rents and home prices are in most cases small in the short run and negligible in the long run. The median first‐year rent increase in the 53 counties is estimated to be 0.90%, with only 9 of the counties still expected to experience rent increases of as much as 4%. In the long run, the median rent increase is estimated to be only 0.10%. Because the purchase of a home is a long‐term investment, we find that the impact on home prices is negligible, similar to the long‐run impact on rents.

Suggested Citation

  • P. Bernstein & G. Tolley, 2000. "The economic impact of reducing on‐base naval housing," Contemporary Economic Policy, Western Economic Association International, vol. 18(3), pages 345-358, July.
  • Handle: RePEc:bla:coecpo:v:18:y:2000:i:3:p:345-358
    DOI: 10.1111/j.1465-7287.2000.tb00031.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.2000.tb00031.x
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1465-7287.2000.tb00031.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-1292, December.
    2. Topel, Robert H & Rosen, Sherwin, 1988. "Housing Investment in the United States," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 718-740, August.
    3. Richard F. Muth, 1981. "Is The Housing Price Bubble About To Burst?," Papers in Regional Science, Wiley Blackwell, vol. 48(1), pages 7-18, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Allen Head & Huw Lloyd-Ellis & Hongfei Sun, 2014. "Search, Liquidity, and the Dynamics of House Prices and Construction," American Economic Review, American Economic Association, vol. 104(4), pages 1172-1210, April.
    2. Antoine Giannetti, 2021. "Home Sales Pair Counts: The Organic Metric for Trading Volume in Housing Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(2), pages 610-634, June.
    3. Rena Sivitanidou, 1999. "Office Rent Processes: The Case of U.S. Metropolitan Markets," Working Paper 8664, USC Lusk Center for Real Estate.
    4. Lee, Nai Jia & Ong, Seow Eng, 2005. "Upward mobility, house price volatility, and housing equity," Journal of Housing Economics, Elsevier, vol. 14(2), pages 127-146, June.
    5. Lozano Navarro, Francisco-Javier, 2018. "Estimación del equilibrio del mercado inmobiliario [Real estate market equilibrium estimation]," MPRA Paper 118260, University Library of Munich, Germany.
    6. Itzhak Ben-David & Pascal Towbin & Sebastian Weber, 2019. "Inferring Expectations from Observables: Evidence from the Housing Market," NBER Working Papers 25702, National Bureau of Economic Research, Inc.
    7. Essi Eerola & Niku Maattanen, 2018. "Borrowing constraints and housing market liquidity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 27, pages 184-204, January.
    8. Paul Cheshire & Christian A. L. Hilber & Hans R. A. Koster, 2015. "Regulating Housing Vacancies Away? The Paradoxical Effects of Mismatch," SERC Discussion Papers 0181, Centre for Economic Performance, LSE.
    9. Paulo M.M. Rodrigues & Rita Fradique Lourenço, 2015. "House prices: bubbles, exuberance or something else? Evidence from euro area countries," Working Papers w201517, Banco de Portugal, Economics and Research Department.
    10. Nathalie Girouard & Sveinbjörn Blöndal, 2001. "House Prices and Economic Activity," OECD Economics Department Working Papers 279, OECD Publishing.
    11. Charles Ka Yui Leung & Joe Cho Yiu Ng, 2018. "Macro Aspects of Housing," GRU Working Paper Series GRU_2018_016, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    12. Li-Min Hsueh & Hsi-Peng Tseng & Chang-Chiang Hsieh, 2007. "Relationship Between the Housing Vacancy Rate, Housing Price, and the Moving Rate at the Township Level in Taiwan, in 1990 and 2000," International Real Estate Review, Global Social Science Institute, vol. 10(1), pages 119-150.
    13. S. Wong & C. Yiu & K. Chau, 2013. "Trading Volume-Induced Spatial Autocorrelation in Real Estate Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 46(4), pages 596-608, May.
    14. Kwame Addae-Dapaah, 2001. "Valuation Accuracy - A Problematic Enquiry," ERES eres2001_101, European Real Estate Society (ERES).
    15. Schünemann, Johannes & Trimborn, Timo, 2023. "Boosting taxes for boasting about houses? Status concerns in the housing market," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 120-143.
    16. Strulik, Holger & Trimborn, Timo, 2014. "Natural disasters and macroeconomic performance: The role of residential investment," University of Göttingen Working Papers in Economics 194 [rev.], University of Goettingen, Department of Economics.
    17. de Wit, Erik R. & Englund, Peter & Francke, Marc K., 2013. "Price and transaction volume in the Dutch housing market," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 220-241.
    18. Gaetano Lisi, 2013. "Matching Models and Housing Markets: the Role of the Zero-Profit Condition," Economic Research Guardian, Weissberg Publishing, vol. 3(1), pages 54-60, June.
    19. Guillaume Rocheteau & Pierre‐Olivier Weill, 2011. "Liquidity in Frictional Asset Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s2), pages 261-282, October.
    20. Koster, Hans R.A. & van Ommeren, Jos, 2020. "Housing search frictions and optimal search," Economics Letters, Elsevier, vol. 189(C).

    More about this item

    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:bla:coecpo:v:18:y:2000:i:3:p:345-358. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.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.