IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v31y2024i19p1964-1968.html
   My bibliography  Save this article

Measuring subjective housing affordability using a data-driven discrete information approach: A case study of Selangor, Malaysia

Author

Listed:
  • Jason Wei Jian Ng
  • Tomáš Želinský
  • Catherine S. Forbes
  • Cash Hao Looi

Abstract

A widely adopted measure of housing affordability is that households should spend no more than 30% of their household income on housing. However, this normative threshold is an arbitrary Great Depression-era guideline and may not be relevant today. This paper proposes a subjective indicator of housing affordability by introducing a method commonly used in the medical sciences. It utilizes discrete information to estimate a subjective affordability ratio that discriminates between subjective house-poor and non-house-poor households. We apply the proposed method to household-level data collected in Selangor, Malaysia, and show that the optimal cut-off point is 23.5%. This estimated value suggests a higher prevalence of house-poor households than is implied by the regularly assumed 30% threshold. In addition, we perform a sensitivity analysis and find the bias in the estimated cut-off point is close to zero.

Suggested Citation

  • Jason Wei Jian Ng & Tomáš Želinský & Catherine S. Forbes & Cash Hao Looi, 2024. "Measuring subjective housing affordability using a data-driven discrete information approach: A case study of Selangor, Malaysia," Applied Economics Letters, Taylor & Francis Journals, vol. 31(19), pages 1964-1968, November.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:19:p:1964-1968
    DOI: 10.1080/13504851.2023.2208833
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2023.2208833
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2023.2208833?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:taf:apeclt:v:31:y:2024:i:19:p:1964-1968. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    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.