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What is the Price Elasticity of Housing Demand?

Eric A. Hanushek, John M. Quigley
Published Date: 
August 1980
Review of Economics and Statistics
pp. 449-454

Disagreement about the responsiveness of housing demand to variations in relative prices persists, despite extensive empirical analyses. Two factors underlie this disagreement: the multidimensional character of housing makes direct observation of prices (as distinct from expenditures) impossible; and, the significant search, transactions, and moving costs associated with changing dwellings imply that, at any instant, a given household's consumption may deviate significantly from its utility maximizing level in a static equilibrium