Lecture X1 Demand and Supply for Residential Housing.pptVIP

Lecture 1 Demand and Supply for Residential Housing in Urban China 柯瑰呼札郡占絮吮临衍吭郡烦泼私酗践声碟碎姐卒倾迭润绑拐蔑植脓加哗Lecture X1 Demand and Supply for Residential HousingLecture X1 Demand and Supply for Residential Housing Introduction Lecture is problem motivated. We start with a problem, why has price of urban housing in China increased so rapidly, and then apply economic theory to explain it. Elementary mathematical tools will be used. In this course you are not responsible for the technical details of statistics but need to understand the meaning of results of statistical analysis. 躬醉烘蓖鸳会欺镣藏皖圾氰码著累蚂栗盼秃挑岩直红毫艇颁咸辖牡捞潍布Lecture X1 Demand and Supply for Residential HousingLecture X1 Demand and Supply for Residential Housing Theory of demand and supply for durable goods Theory of demand for non-durable goods applies if quantity is measured by the total stock being used or consumed – floor space per capita. Major variables explaining demand per capita is real income per capita and relative price. Major variables explaining supply is relative price and construction cost. 任哼贷碗域族智棉袍仿孺胞炊忠腋翠绵脐刨龟降养拢将嚏寨遭梭陆企状哲Lecture X1 Demand and Supply for Residential HousingLecture X1 Demand and Supply for Residential Housing Demand and supply equations Demand: qt = bo + b1 yt + b2 pt + u1t (1) Supply: qt = co + c1 pt + c2 ct + u2t (2) where qt denotes housing space per capita, yt denotes real disposable income per capita, pt denotes relative price of housing and ct denotes real construction cost; u1t .and u2t are random residuals. These are two structural equations. 秃患雁戴救迸萤猫玉鞋见嘘纵挤蹦汐淮凡庭骸散舷始酌邢赚漓茧卵话荔誉Lecture X1 Demand and Supply for Residential HousingLecture X1 Demand and Supply for Residential Housing Reduced form equations pt = d0 + d1 yt + d2 ct + v1t (3) qt = r0 + r1 yt + r2 ct + v2t (4) derived by solving the structural equations for th