A New Approach to Estimating the Production Function for Housing.pdf.pdf' (293.3 kB)
A New Approach to Estimating the Production Function for Housing
journal contribution
posted on 2005-07-12, 00:00 authored by Dennis EppleDennis Epple, Brett Gordon, Holger SiegDating 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.