Economic Studies of the housing market have taken many forms.There have been those which concentrate on macro-behaviour through the formulation and economic estimation of aggregate demand and supply relationships.Other studies have been more concentra...
Economic Studies of the housing market have taken many forms.There have been those which concentrate on macro-behaviour through the formulation and economic estimation of aggregate demand and supply relationships.Other studies have been more concentrated with the operation of particular local markets.Through those, the micro aspect of housing market behaviour, especially its spatial dimension tends to receive special attention.Those which have looked at residential location (for example, Alonso, Muth, and Evans), the filtering Process (Grigsby), and the determination of relative house prices (Wilkinson), all fall into this category.
Housing Stock adjustment models can also be used to analyse the dynamic behaviour within particular housing submarkets when the dwellings and other housing circumstances (tenure categories, location, etc.) are reasonably homogeneous.They are not, however, ideally designed to focus attention on the micro price determining process.For this purpose, it is necessary to concentrate on the way in which individual buyers and seller interact through market transactions.This level of analysis becomes particularly important when there is a heterogeneous housing stock.In such cases it is of interest to examine the way individual houses are allocated and their relative prices (implicit prices) determined, and to analyse the links between individual houses or, a slightly more aggregate level, between different submarkets.Those micro-theories suggested above have been developed because of the heterogeneities of the houses.
Traditionally, this central role in spatial analysis has been held by a subset of all amenities pertaining to the houses, especially access to CBD.But the analysis of market must consider all the housing characteristics, that is, heterogeneity, fixed location, durability indivisibility.Therefore, it is necessary that more general approach, "Hedonic Pricing Approach," that is.The determination of relative house prices is applied to the regression of house prices.
The success of hedonic estimation lies in the appropriateness of the data base and the correctness of the equation specification.In these aspects, it seems that there are many problems to be developed.