Price and Income Elasticities of Demand for Housing Characteristics in the City of Barcelona

GARCIA J. and RAYA J. M. Price and income elasticities of demand for housing characteristics in the city of Barcelona, Regional Studies. This paper estimates price and income elasticities of demand for housing characteristics using the information of properties appraised in the city of Barcelona (1998-2001). It employs a two-stage approach, estimating hedonic price equations for different districts in order to estimate subsequently the corresponding demand equations. The results allow an analysis to be made of the complementarity or substitutability relationships among the characteristics analysed, and also to catalogue these characteristics as goods. By knowing the price, cross and income elasticities of housing characteristics, policy recommendations can be made about the type of housing units that are the most desirable to be subsidized.