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Moving Costs and the Dynamics of Housing Demand

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  • Viggo Nordvik

    (Norwegian Building Research Institute, P O Box 123, Blindern, N-0314 Oslo, Norway, viggo.nordvik@byggforsk.no)

Abstract

It is well established that moving costs make households adjust their housing consumption far less frequently than they would have done in a world in which relocation was costless. This paper adds to our understanding of the dynamics of housing demand by constructing a life-cycle model of housing demand on which several numerical experiments are performed. Among other things, it is shown how the sign of price elasticities may be indeterminate because of changes in moving careers induced by price changes. The paper also demonstrates that planned (endogenous) moving activity and stochastic forced moves should be analysed within a common analytical framework. One simple version of such a common analytical framework is presented and discussed.

Suggested Citation

  • Viggo Nordvik, 2001. "Moving Costs and the Dynamics of Housing Demand," Urban Studies, Urban Studies Journal Limited, vol. 38(3), pages 519-533, March.
    • Handle: RePEc:sae:urbstu:v:38:y:2001:i:3:p:519-533
    DOI: 10.1080/00420980120027483
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    References listed on IDEAS

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    1. Muth, Richard F., 1974. "Moving costs and housing expenditure," Journal of Urban Economics, Elsevier, vol. 1(1), pages 108-125, January.
    2. Harrington, David E., 1989. "An intertemporal model of housing demand: Implications for the price elasticity," Journal of Urban Economics, Elsevier, vol. 25(2), pages 230-246, March.
    3. Edin, Per-Anders & Englund, Peter, 1991. "Moving costs and housing demand : Are recent movers really in equilibrium?," Journal of Public Economics, Elsevier, vol. 44(3), pages 299-320, April.
    4. Amundsen, Eirik S., 1985. "Moving costs and the microeconomics of intra-urban mobility," Regional Science and Urban Economics, Elsevier, vol. 15(4), pages 573-583, November.
    5. Venti, Steven F. & Wise, David A., 1984. "Moving and housing expenditure: Transaction costs and disequilibrium," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 207-243.
    6. Artle, Roland & Varaiya, Pravin, 1978. "Life cycle consumption and homeownership," Journal of Economic Theory, Elsevier, vol. 18(1), pages 38-58, June.
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    Cited by:

    1. Sanghyun Kim & Juhyung Kim & Jaejun Kim, 2016. "Structural Changes in the Korean Housing Market before and after Macroeconomic Fluctuations," Sustainability, MDPI, vol. 8(5), pages 1-20, April.
    2. Hilber, Christian A.L. & Lyytikäinen, Teemu, 2017. "Transfer taxes and household mobility: Distortion on the housing or labor market?," Journal of Urban Economics, Elsevier, vol. 101(C), pages 57-73.
    3. Christian A. L. Hilber & Teemu Lyytikäinen, 2012. "The Effect of the UK Stamp Duty Land Tax on Household Mobility," SERC Discussion Papers 0115, Centre for Economic Performance, LSE.
    4. Joseph Nichols, 2004. "A Life-cycle Model with Housing, Portfolio Allocation, and Mortgage Financing," Econometric Society 2004 North American Winter Meetings 205, Econometric Society.

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