An empirical model for housing tenure choice and demand in the Spanish market

Abstract

This paper analyzes a combined selection model between purchasing or renting a housing unit and the amount spent on it. Similar to what has been studied in several other works, if both decisions are simultaneously considered, the estimators of the parameters are biased. The primary focus of this study is to determine the probabilities of housing purchase and rent as well as the price and income elasticities of housing demand, and observe how these parameters vary when fiscal conditions change.

Keywords:

• expenditure on housing
• housing demand
• income elasticity
• price elasticity