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The housing stock, housing prices, and user costs

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  • Jonathan Halket

    (University of Essex)

  • Lars Nesheim

    (UCL - University College of London [London])

  • Florian Oswald

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using the English Housing Survey, we estimate a supply side selection model of the allocation of properties to the owner-occupied and rental sectors. We find that location, structure and unobserved quality are important for understanding housing prices, rents and selection. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for estimates of rent-to-price ratios and can explain some puzzling correlations between rent-to-price ratios and homeownership rates. We interpret this as strong evidence in favor of contracting frictions in the rental market likely related to housing maintenance.

Suggested Citation

  • Jonathan Halket & Lars Nesheim & Florian Oswald, 2015. "The housing stock, housing prices, and user costs," Working Papers hal-03393224, HAL.
    • Handle: RePEc:hal:wpaper:hal-03393224
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03393224
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    3. Carozzi, Felipe, 2020. "Credit constraints and the composition of housing sales. Farewell to first-time buyers?," LSE Research Online Documents on Economics 91193, London School of Economics and Political Science, LSE Library.
    4. Daniel Levy & Avichai Snir, 2018. "Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets," Working Paper series 18-16, Rimini Centre for Economic Analysis.
    5. Baye, Vera & Dinger, Valeriya, 2022. "Investment Incentives of Rent Controls and Gentrification - Evidence from German Micro Data," VfS Annual Conference 2022 (Basel): Big Data in Economics 264120, Verein für Socialpolitik / German Economic Association.
    6. Vera Baye & Valeriya Dinger, 2023. "Investment incentives of rent controls and gentrification – Evidence from German micro data," IEER Working Papers 122, Institute of Empirical Economic Research, Osnabrueck University.
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