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Can Pay? Won't Pay?' or Economic Principles of 'Affordability

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  • K.E. Hancock

    (Centre for Housing Research, University of Glasgow, 25, Bute Gardens, Glasgow G12 8RS, UK)

Abstract

The term 'afford ability' has been gaining currency in housing policy debates, but neither government nor academic researchers have given much consideration to defining it. This paper considers what meanings have been given to the term affordability in practice and suggests a range of analytically more useful definitions. It argues from economic first principles that it is more logical to use some form of residual income definition than one based on a prescribed ratio of housing costs to income. Most researchers have been using a ratio definition. The paper then uses data from a household survey in the Glasgow Travel-to-Work Area in 1988/89 to examine the incidence of 'unaffordability' of housing costs according to a variety of definitions.

Suggested Citation

  • K.E. Hancock, 1993. "Can Pay? Won't Pay?' or Economic Principles of 'Affordability," Urban Studies, Urban Studies Journal Limited, vol. 30(1), pages 127-145, February.
    • Handle: RePEc:sae:urbstu:v:30:y:1993:i:1:p:127-145
    DOI: 10.1080/00420989320080081
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    References listed on IDEAS

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    1. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October.
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    Cited by:

    1. Bundorf, M. Kate & Pauly, Mark V., 2006. "Is health insurance affordable for the uninsured?," Journal of Health Economics, Elsevier, vol. 25(4), pages 650-673, July.
    2. Mark Robinson & Grant M. Scobie & Brian Hallinan, 2006. "Affordability of Housing: Concepts, Measurement and Evidence," Treasury Working Paper Series 06/03, New Zealand Treasury.
    3. Li, Lanlan & Luo, Xuan & Zhou, Kaile & Xu, Tingting, 2018. "Evaluation of increasing block pricing for households' natural gas: A case study of Beijing, China," Energy, Elsevier, vol. 157(C), pages 162-172.
    4. Louis-Francois PAU, 2009. "Enabling Mobile Communications for the Needy: Affordability Methodology, and Approaches to Requalify Universal Service Measures," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 13(2), pages 128-135.
    5. Sherry A. Glied, 2008. "Mandates and the Affordability of Health Care," NBER Working Papers 14545, National Bureau of Economic Research, Inc.
    6. Andrea Kunnert, 2016. "Leistbarkeit von Wohnen in Österreich. Operationalisierung und demographische Komponenten," WIFO Studies, WIFO, number 58932, April.

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