טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentTsubary Vera
SubjectEstimting the Demand Functions for Housing Characteristics
DepartmentDepartment of Architecture and Town Planning
Supervisor Professor Emeritus Daniel Shefer


Abstract

An attempt was made to decompose the bundle of housing into its components and to estimate the economic value of improving housing attributes (amenities), using the household’s willingness-to-pay approach, as revealed in households’ direct responses (using a questionnaire) and through observed housing market data.

Three different approaches were used in the current study: the hedonic price approach, the discrete choice approach and the, inquiry approach. Special attention was given to the relationship which exists between dwelling prices and housing characteristics. This relationship forms the basis for identifying and defining the Inverse demand function for each attribute, thus enabling estimation of the utility expected to accrue from an improvement in the quantity and/or quality of each particular attribute. In addition, special attention was given to the household’s perception of housing amenities.

A sample of 475 households and housing units In 13 selected neighborhoods in Haifa was investigated. To differentiate from previous studies, the housing market in Haifa was stratified into several distinct, homogenous markets.

An economic analysis of the housing characteristics is presented based on the results of the hedonic price mode. The probability of different types of households choosing different types of dwellings, and the assignment of different types of dwellings to different types of households was obtained with the application of the discrete choice model.

The findings of the present study demonstrate a need to delineate housing markets and, more specifically, to identify the value that each population group attached to each characteristic. Concomitantly, there exists a need for additional studies based on larger samples, which may reconcile the values derived from alternative approaches. The results of these additional studies will help in an estimation of the demand functions for different housing units.