Presents a theory of short-run market adjustments to exogenous demand shifts that is consistent with evidence from the Housing Assistance Supply Experiment (HASE). It is argued that (1) a 1.0 percent shift in rental demand leads to a rent change of only 0.26 percent, whereas capital value can change as much as 5.0 percent; and (2) landlords derive capital value in a tightening market primarily from decreased vacancy loss (because of monopolistic competition among themselves) rather than from increased nominal rent. Using HASE data, the theory predicts that a housing allowance program would cause short-run rent increases of 0.6 to 1.0 percent and capital value increases of 1.6 to 6.5 percent, depending on the size and duration of allowance-induced demand shifts.

Spatial fixity is one of the characteristics that distinguishes housing from most other goods and services in the economy. In general, housing cannot be moved from one part of the country to another in response to shortages or excesses in particular areas. The modelling of housing markets and the interlinkages between markets at different spatial levels - international, national, regional and urban - are the main themes of this book. A second major theme is disaggregation, not only in terms of space, but also between households. The book argues that aggregate time-series models of housing markets of the type widely used in Britain and also in other countries in the past have become less relevant in a world of increasing income dispersion. Typically, aggregate relationships will break down, except under special conditions. We can no longer assume that traditional location or tenure patterns, for example, will continue in the future. The book has four main components. First, it discusses trends in housing markets both internationally and within nations. Second, the book develops theoretical housing models at each spatial scale, starting with national models, moving down to the regional level and, then, to urban models. Third, the book provides empirical estimates of the models and, finally, the models are used for policy analysis. Analysis ranges over a wide variety of topics, including explanations for differing international house price trends, the causes of housing cycles, the role of credit markets, regional housing market interactions and the role of housing in urban/suburban population drift.

The speed with which its house prices respond to real economic shocks is critical to the functioning of an economic market. This speed is determined relative to the magnitudes of house price changes on the off-equilibrium path, as the market adjusts. When such changes are caused by an unexpected shift in housing demand, which is a substantial component of the variation in house prices, the magnitudes are determined by the elasticity of housing supply. I examine local housing-supply dynamics in each of 47 U.S. metropolitan-area housing markets using a unique market-level panel dataset. The data are analyzed with a conditional vector-autoregression, which characterizes the dynamic responses of housing price and stock to an increase in housing demand caused by a shift in employment. These response time-paths are used to create measures of short-, medium-, and long-run supply elasticities. Both the time-paths and the implied elasticities vary widely. I use several area characteristics to explain the variation in the supply elasticity measures across metropolitan areas. The results suggest that an area's population, land area, historical growth rate, region, January temperature, age of housing stock and incentive to regulate housing are all important determinants of a market's house-price response.

Since 1970 the United States government has spent over half a billion dollars on social experiments intended to assess the effect of potential tax policies, health insurance plans, housing subsidies, and other programs. Was it worth it? Was anything learned from these experiments that could not have been learned by other, and cheaper, means? Could the experiments have been better designed or analyzed? These are some of the questions addressed by the contributors to this volume, the result of a conference on social experimentation sponsored in 1981 by the National Bureau of Economic Research. The first section of the book looks at four types of experiments and what each accomplished. Frank P. Stafford examines the negative income tax experiments, Dennis J. Aigner considers the experiments with electricity pricing based on time of use, Harvey S. Rosen evaluates housing allowance experiments, and Jeffrey E. Harris reports on health experiments. In the second section, addressing experimental design and analysis, Jerry A. Hausman and David A. Wise highlight the absence of random selection of participants in social experiments, Frederick Mosteller and Milton C. Weinstein look specifically at the design of medical experiments, and Ernst W. Stromsdorfer examines the effects of experiments on policy. Each chapter is followed by the commentary of one or more distinguished economists.

A global look at the reasons behind the recent economic collapse, and the responses to it The speculative bubble in the housing market began to burst in the United States in 2007, and has been followed by ruptures in virtually every asset market in almost every country in the world. Each country proposed a range of policy initiatives to deal with its crisis. Policies that focused upon stabilizing the housing market formed the cornerstone of many of these proposals. This internationally focused book evaluates the genesis of the housing market bubble, the global viral contagion of the crisis, and the policy initiatives undertaken in some of the major economies of the world to counteract its disastrous affects. Unlike other books on the global crisis, this guide deals with the housing sector in addition to the financial sector of individual economies. Countries in many parts of the world were players in either the financial bubble or the housing bubble, or both, but the degree of impact, outcome, and responses varied widely. This is an appropriate time to pull together the lessons from these various experiences. Reveals the housing crisis in the United States as the core of the meltdown Describes the evolution of housing markets and policies in the run-up to the crisis, their impacts, and the responses in European and Asian countries Compares experiences and linkages across countries and points to policy implications and research lessons drawn from these experiences Filled with the insights of well-known contributors with strong contacts in practice and academia, this timely guide discusses the history and evolution of the recent crisis as local to each contributor's part of the world, and examines its distinctive and common features with that of the U.S., the trajectory of its evolution, and the similarities and differences in policy response.

The Economics of Housing Vouchers is a seven-chapter text that examines the housing choices of low-income families in two metropolitan areas, namely, Phoenix and Pittsburgh. Some of these households are offered a novel kind of housing subsidy, including a housing allowance or housing voucher, in an experimental framework designed to test this approach to demand-side housing assistance. Chapter 1 presents an overview of U.S. housing programs and the dimensions of the U.S. housing problem. Chapter 2 provides a simple microeconomic model that conceptualizes household behavior, as well as a summary of some of the extant evidence on housing demand. This chapter also estimates the housing demand models for the low-income population in the Demand Experiment, using housing expenditures to measure housing. Chapter 3 applies a hedonic index of housing services that abstracts from particular characteristics of the household or landlord that may affect rent and attempts to measure housing in a more objective manner. Chapter 4 describes a model of household behavior that leads to the methodology for estimating experimental effects. Chapter 5 repeats the analysis for Minimum Rent households, while Chapter 6 examines the effect of both kinds of Housing Gap allowance payment on the consumption of housing services. Lastly, Chapter 7 focuses on the implications of the experimental findings for housing policy. This chapter compares a housing allowance strategy with two other approaches, namely, a pure income-transfer approach and a construction-oriented approach. This book is of value to workers in housing policy, including economists, regional and other social scientists in academia, housing analysts, the Congress, housing lobby groups, and state and local government housing officials.