This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. June 2010
  5. A New Approach to Estimating the Production Function for Housing

A New Approach to Estimating the Production Function for Housing

  • Dennis Epple
  • Brett Gordon
  • Holger Sieg
American Economic Review
vol. 100, no. 3, June 2010
(pp. 905-24)
Download Full Text PDF

Abstract

Dating to the classic works of Alonso, Mills, and Muth, the production function for housing has played a central role in urban economics and local public finance. This paper provides a new flexible approach for estimating the housing production function which treats housing quantities and prices as latent variables. The empirical analysis is based on a comprehensive database of recently built properties in Allegheny County, Pennsylvania. We find that the new method proposed in this paper works well in the application and provides reasonable estimates for the underlying production function. (JEL C51, D24, R11, R31)

Citation

Epple, Dennis, Brett Gordon, and Holger Sieg. 2010. "A New Approach to Estimating the Production Function for Housing." American Economic Review, 100 (3): 905-24. DOI: 10.1257/aer.100.3.905

Additional Materials

JEL Classification

  • C51 Model Construction and Estimation
  • D24 Production; Cost; Capital, Total Factor, and Multifactor Productivity; Capacity
  • R11 Regional Economic Activity: Growth, Development, and Changes
  • R31 Housing Supply and Markets