Demographics, Human Capital, and Housing Demand
Massachusetts Institute of Technology (MIT) - Center for Real Estate
Piet M. A. Eichholtz
University of Maastricht - Limburg Institute of Financial Economics (LIFE)
October 15, 2007
This paper aims to investigate how demographics determine the amount and the quality of housing services demanded. It contributes to the current debate in three ways: First, based on a very detailed 2001 cross-section of English households, it ﬁnds that human capital is a key driver for housing demand. Second, it reﬁnes the existing methodology by distinguishing between life-cycle variables that are expected to change with age for each household, and cohort variables, that are determined by the household's birth-cohort and not by age. Third, its ﬁndings are relevant to other European countries that already experience population shrinkage at an unprecedented magnitude. A scenario analysis with diﬀerent population pro jections shows that in case of stagnating household numbers total demand can still increase as the population grows older.
Number of Pages in PDF File: 35
Keywords: housing demand, residential real estate, demographic change, demographics, housing
JEL Classification: R21working papers series
Date posted: July 28, 2009
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