Abstract
The traditional rental adjustment equation is flawed in that the equilibrium paths for the adjustment of rents and vacancy rates cannot hold simultaneously over time. This paper suggests a two-equation model of rental adjustments based on adaptive expectations rather than the single-equation model presented in the traditional literature, and provides empirical tests. Annual data from the housing market in Hong Kong during the 1980-96 period are consistent with the adjustment equation. The results also show that the rate of change of real rents is neutral with respect to inflation.
Original language | English |
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Pages (from-to) | 1769-1782 |
Number of pages | 14 |
Journal | Urban Studies |
Volume | 36 |
Publication status | Published - 1999 |
Keywords
- PRICE
- MARKET
- INFLATION
- BEHAVIOR
- TAXES
- LAND