Abstract

The Demand for Rental Housing ill Taipei Municipal

By

Lin Ming Huei

The Graduate School of Land Economics, National Chengchi University and China Research Institute of Land Economics, 1988

Under the Supervision of Professor Lin Yuan-hsing and Professor Isaac M. Ofori

The rental housing submarket In Taipei municipal appears to be important, since the home renter ship in Taipei has been higher than any other area in Taiwan. Therefore Taipei municipal is chosen as the area of this research stressig the demand for rental housing.

This thesis is organized as follows:

In chapter I both the source of data and methods of analyses are so important that we have to mention here. The data for the empirical analyses of this research are seperately obtained from 1985 Survey of Family Income, Expenditure and Income Distribution and

1986 Housing Survey of Taipei Municipal by Bureau of Budget, Accounting & Statistic.

The main purpose of chapter II is to carefully review some relevant theoretical literature and empirical development concerning housing demand model. In particular , ;we introduce some concept concerning (1) the major sources of biase in estimates of demand equation ; (2) the Income and price elasticities ; (3) appropriate functional form for housing demand equations ; and (4) the dynamic specification of the model.

In chapter III the general situation of rental housing In Taipei is described and analyzed. The main finding in this chapter is that an increase income, all other thing being equal, may result in higher expenditure on housing ; however the housing expenditure- income ratios tend to be lower for the rich than for the poor. It implies that the percentage of income spent on rent falls as income rises.

Chapter IV presents some theoretical models on which the empirical analyses in chapter V are based. In section 1, two specifications of housing demand functions are derived. The first: is the linear expenditure functions derived from a Stone-Geary utility function. The second is the log-linear demand function which has been widely used in empirical studies of housing demand. In order to test in next chapter the hypothesis that demographic characteristics variables other than income, such as age, sex and education of household head, and household size and the number of children, affect the demand for rental housing, we also develop in section 2 two theoretical models that include these demographic variables.

Chapter V presents the empirical analyses consisting of four sections. In section 1 we try to investigate the factors influencing the tenure choice of households. And the income is found the main determinant affecting tenure choice. Since the education, occupation of household head and some other household characteristics are likely related to income, all these variables can indirectly account for some significant influence upon the tenure choice. In section 2 two models including only price and income as indepent variables are estimated . Comparable results are obtained from different demand functions. The explanatory power of log-linear model as measured by the value of R^2 IS more substantial than that of linear model. The main finding of this section is that both income and prices elasticities are substantially less than unity. It indicates that the demand for rental housing in Taipei is inelastic. The comparisons of the elasticities in model with log-linear demand function are also made with empirical findings of earlier similar studies by the other authors in R.O.C. In section 4 an attempt is made to understand the role of demographic variables. We asume that apart from income and prices, other factors may affect housing demand; different demographic groups may have different relative preference for housing and other goods and services. To test- this assumption, demographic variables are included as dummy variables in demand equations. In our analyses, the effect of demographic variables were however somewhat ambiguous. Different model specifications and choice of dependent variables result in differing estimate. Our analyses have found that the inclusion of demographic variables in log-linear demand equation has some impact on estimated income elasticity and little on estimated price elasticity. The investigation of the factors determining the relative size of rental

housing submarket may be considered essential for understanding housing market behavior. The objective of section 4 is to evaluate the influence of a few basic household characteristics (specially household income and age household head ) on tenure choice. The percentage that rent is referred to as the home rentership rate. This section present evidence that household income and age of household head have some effect on the home renter-ship. Rentership declines linearly with income increases holding other thing constant. Holding other thing constant, rentership continues to decline through, the age range.

And finally in chapter VI some summaries and conclusions are drawn. Since an advanced analysis of housing demand require some more extensive information and

data than the Bureau of Budget, Accounting & statistics could provided, we recommend that this bureau add or renew some content of the survey. And thus these new data would be a great asset to further empirical analysis of housing. The dynamic model could be tested despite its econometric problems, if we are able to obtain some longtudinal data on the behavior of households.

參考書目
一、中文部份:
1.行政院經建會往都處，住宅租賃制度之研究，民國73年3月。
2.行政院經建會住都處，台灣地區住宅存量與住宅狀況研究，民國74年6月。
3.行政院經建會往都處，住宅需求影響因素之研究，民國74年9月。
4.李庸三，計量經濟方法，建興圖書印刷公司，民國62年9月初版，頁347。
5.吳森田，居住需求的所得彈性:台北市的實證結果，經濟研究，第23期，民國70年12月。
6.吳森田，台灣地區居住需求之實證研究，華福書局，民國71年元月。
7.林昇平譯，個體經濟的理論與應用，台灣銀行經濟研究室編印，民國68年7月。
8.郭婉容，個體經濟學，三民書局，民國74年4版。
9.張榮源，台北市住宅租賃問題之研究，政大地政研究所碩士論文，民國69年。
10.賈宜鳳，台北都會區住宅需求函數之估測，興大經濟研究所碩士論文，民國72年。
11.楊重信、陳春益，台灣地區居住空間水準及住宅需求之研究，內政部營建署委託研究，民國76年6月。
12.鄧建民，台灣地區住宅需求之研究，興大都市計畫。研究所碩士論文，民國74年7月。
13.嚴世傑譯，SPSS/PC+使用手冊，儒林圖書公司，民國75年1月初版。

二、英文部份:
1.Anderson, G.S,, “ A linear Programming Model of Housing Market Eguilibrum”, J. Urban Econ.11,158-168, 1982.
2.Awan, K,, Odling-Smee, J.C., and Whitehead, C.M.E,, Household Attributes and the Demand for Private Rental Housing ” , Economic, 49,183-200,May, 1982,
3. Barten, A.P,, “ The Systems of Consumer Demand Functions Approach: A Rieview ”, Econometrica, Vol .45, No.1, January, 1977.
4.Brown,B,, “ Location and Housing Demand ”, J. Urban, Econ.17,30-41,1985.
5.Braldly, M,, Macroeconomics a gaggle; : 1985.
6. Cooke, T.W,, “ Evolution of Urban Housing Stocks: A Model to Baltimore and Houston ” , J. Urban Ecno. 16,317-338, 1984.
7.Cronin, E,J,, " Estimation of Dynamic Linear Expenditure Functions for Housing ”, The Rieview of Ecno. and Statistics, Vol.64, 1982.
8.Cronin, E.J,, " Market Structure and the Price of Housing Services ” , Urban Studies, 20, 365-375,1983.
9.Dynarski, Mo, " Housing Demand and Disequilibrium ”, J, Urban Econ. 17, 42 57, 1985.
10.Eberts, R,W,, " Wage Gradients, Rent Gradients, and the Price Elasticing of Demand for Housing :An Empirical Investigation ”, J. Urban Econ.12,168-176,1982.
11.Friedman, Jo and Weinbrg, D,H, " The Demand for Rental Housing 3 Evidence from the Housing Allowance Demand Experiment ”, J. Urban Econ. 9,311-331, 1981.
12.Friedman, J. and Weinberg, D,H, " Housing Consumption under a Constrained Income Transfer ”, J. Urban Econ, 11,253-271,1982.
13.Follain, J,R, and Jimenez, E,, " The Demand for Housing Characteristics in Developing Countries Urban Studies. 22,421-432,1985.
14.Gerking, S,D., and Boyes, W,J, " The Role of Functional From in Estimating Elasticities of Housing Expenditures ”, Sourthern Econo. Journal, 1980.
15.Gillingham, R. and Hageman, R., “ Cross-Sectional Estimation of A Simultaneous Model of Tenure Choice and Housing Services Demand ”, J. Urban Econ. 14, 16-39, 1983.
16.Goodman, A.C., “ Replicative Evidence on the Demand for- Owner-Occupied and Rental Housing ”, 1982.
17.Guljarau, D,, Basic Econometrics, Taipei 2 The Southeast Book Company,1979.
18.Goodman, A.C. and Kawai, M., " Permanent Income, Hedonic Prices, and Demand for Housing :New Evidence J. Urban Econ.12,214-237,1982.
19.Goodman, A,C, and Kawai, M., " Length-of-Residents Discounts and Rental Housing Demand :Theory and Evidence ”, Land Econ.,Vol.61No.2,May, 1985.
20.Goodman, A.C. and Kawai, M., " Estimation and Policy Implications of Rental Housing Demand ”, J. Urban, Econ. 16,76-90,1984.
21.Goodman, A.C, and Kawai, M., “ Functional Form and Rental Housing Market Analysis ”, Urban Studies.21,367-376 1984.
22.Hanushek, E.C. and Quigley, J,M., " The Dynamics of the Housing Market: A Stock Adjustment Model of Housing Consumption ”, J, Urban Econ. 6,90-111,1979.
23.R,D.B., “ Indebtedness in Black and White Families”, J. Urban Econ. 1,48-60,1974.
24.Kain, JOE” and Quigley, JUM,, “ Housing Market Discrimination, Home-ownership, and Savings Behavior
25.Kent, R,J,, " The Relationship between Income and Price Elasticities in Studies of Housing Demand, Tenure Choice, and Household Formation ”, J. Urban Econ, 13, 196-204,1983.
26.Lea, M.J., “ Tenure Choice and Condominum Conversion J, Urban Econ. 14,127-144,1983.
27.Lee, T,H,, " Demand for Housing : A Cross-Section Analysis ”, The Riview of Econ. and Statistics,May, 1963.
28,Lee, T,H,, " The Stock Demand Elasticities of Non-Farm Housing ”, The Riview of Econ. and Statistics,46, Feb., 1964.
29.Lee, T,H., “ Housing and Permanent Income : Tests Based on A Three -Year Reinterview Survey ”, The Riview of Econ. and Statistic No.5, July,1977.
30.Lee, L.F ., " Estimation of Some Limited Dependent Variable Models with application to Housing Demand Jo Urban Econ. 8,357-382,1978.
31.Lee, T,H., and Kong, C.M., “ Elasticities of Housing Demand ”, Sourthern Econ. Journal.44,1977.
32.Lee, F, deg, and Ekanem, N.F., " The Supply of Rental Housing ”, American Econ. Riview. 61,806-817, 1971.
33.Lee, L.F, and Trost, R.P., “ Estimation of Some Limited Depedent variable Models with Application to Housing Demand ” , ].Urban Econ.8,357-382,1978.
34.Leeuw, F,d., “ The Demand for Housing : A Riview of Cross-Section Evidence ”, The Review of Econ. And Statistics, Vol. LIII,Feb., 1971.
35.Li, M.M;, " A Logit Model of Homeownership ”, Econometrica, Vol.45, No.5, July,1977.
36.Lierop, JOV,, “ House Price Structure and Market Equilibrum ”, J, Urban Econ. 11,272-289,1982.
37.Lim, G.C., “ Economics of Residential Crowding in Developing Countries ”, J, Urban Econ.16,173-186,1984.
38.Macrae, C,D,,, " Urban Housing with Discrets Structures J. Urban Econo11,131-147,1982.
39.Maisel, S,J., Burnham, J. B., and Austin, J.S., " The Demand for Housing :A Comment ”, Review of Econ. and Statistics, Vol .53,1971.
40.Mayo, S,K., “ Theory and Estimation in Economics of Housing Demand ”, J. Urban Econ. 10,95-116,1981.
41.Mcallister, D., “ The Demand for Rental Housing 3 An Investigation of Some Demographpic and Economics Determinants ”, Ann Reignal Science, Vol.1,1967.
42McCallum, D, and Benjamin, “ Low-Income Urban Housing in the Third World : Broadening the Economic Perspective ” , Urban Studies,22,277-287,1985.
43.Muth, R,F,, “l\4oving Costs and Housing Expenditure J. Urban Econ.1,108-125,1974.
44.ozanne L. and Thibodeau T., " Explaining Metropolitan Housing Price Difference ” , j, Urban Econ,13,51-66,1983,
45.Parks, R,W., " Systems of Demand Equation 3 An Empirical Comparision of Alternative Functional Forms Econometrica, Vol . 37 ,No.4 ,629-650, 1969
46.Pena, D, and Javier, R,C., " Distributional Aspects of public Rental Housing and Rent Control Policies in Spain ” , J, Urban Econ.15,350-370,1984.
47.Plaut, S,E,, " Endogeneous Mortgage Interest and the Consumption of Housing ” , J. Urban Econ. 16,31-45, 1984'.
48.Pollak, R,A, and Wales, T.R., “ Estimation of the linear Expenditnre System”, Econometrica, Vol .37, No. 4 ,611-628,oct,1969
49.Polinsky, A,M., “ The Demand for Housing : A Study in Specification and Grouping ” . Econometrica, Vol.45, No.2, March,1977.
50.Polinsky, A,M. and Ellwood, D.T,, " An Empirical Reconciliation of Micro Grouped Estimates of the Demand for Housing ”, Review of Economics and Statistics,Vol.61,1979.
51. Sweeney, J.L., “ A Commodity Hierarchy Model of the Rental Market ”, Journal of Urban Economics 1,288-323, 1974.
52.Straszheim,M.R., " Estimation of the Demand for Urban Housing Service from Household Interview Data ”, The Review of Economics and Statistics, Vol.15,Feb,1973.
53.Weinberg, D,H,, Friedman, J. and Mayo, S.K., " Intra-urban Residential Mobility The Role of Transactions Costs, Market Imperfections, and Household Disequilibrium”, J. Urban Econ. 9,332-348,1981.
54.Whitehead, C,M, and Kleinman, M., " The Private Rented Sector :A Characteristics Approach ”, Urban Studies,22, 507-520,1985.
55,Wilkinson, R,K," The Income Elasticity of Demand for Housing”, Oxford Economic Paper 25,No.3,November, 1973.
56.Yi, C.C., " Urban Housing Satisfiction in a Transitional Society : A Case Study in Taichung, Taiwan ” Urban Stadies, 22, 1-12,1985.