A Simultaneous Model and Empirical Test of the Demand and Supply of Retail Space

Posted: 31 Dec 1998

See all articles by John D. Benjamin

John D. Benjamin

American University - Kogod School of Business

G. Donald Jud

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance

Daniel T. Winkler

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance

Abstract

Much of the burgeoning distress of the 1990s in the United States retail space markets reflects a growing mismatch in the amount and location of retail space demand and supply. Understanding the demand and supply for retail space is critically important to academics, professionals and others associated with owning, operating and financing retail space. Using data from nineteen major metropolitan statistical areas (MSAs) for the period 1986-95, this article develops a simultaneous model of retail space demand and supply which includes the influence of vacancy rate. The model and results provide evidence about how demand and supply for retail space respond to changes in retail sales, rental prices, land-use regulation and land availability, and the cost of capital. The results show inelastic price elasticities of demand and supply for retail space.

JEL Classification: L8, L16

Suggested Citation

Benjamin, John D. and Jud, G. Donald and Winkler, Daniel T., A Simultaneous Model and Empirical Test of the Demand and Supply of Retail Space. Journal of Real Estate Research, Vol. 16, Issue 1, September 1998. Available at SSRN: https://ssrn.com/abstract=125948

John D. Benjamin (Contact Author)

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Department of Finance
Washington, DC 20016
United States
(202) 885-1892 (Phone)
(202) 885-1946 (Fax)

G. Donald Jud

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance ( email )

P.O. Box 26165
Greensboro, NC 27412
United States
336-334-3091 (Phone)
336-334-4141 (Fax)

Daniel T. Winkler

University of North Carolina (UNC) at Greensboro - Department of Accounting and Finance ( email )

Greensboro, NC 27412
United States
336-256-0122 (Phone)

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