VTechWorks staff will be away for the Thanksgiving holiday beginning at noon on Wednesday, November 27, through Friday, November 29. We will resume normal operations on Monday, December 2. Thank you for your patience.

Browsing by Author "Rosenthal, S. S."

Now showing 1 - 3 of 3
  • Thumbnail Image
    Estimating the consumption and investment demands for housing and their effect on housing tenure status
    Ioannides, Y. M.; Rosenthal, S. S. (MIT Press, 1994-02)
    Theoretical work suggests that families live in owner-occupied housing if their investment demand for housing exceeds their consumption demand for housing. Using household data from the 1983 Survey of Consumer Finances, we test this theory by estimating an ordered probit model of whether families rent without owning property, rent while owning property other than their home, own their home without owning other properties, or own their home in addition to other properties. For owner-occupiers who own additional property, both the investment and consumption demands are directly observed enabling us to separately identify these functions. Results suggest that investment demand is more sensitive to wealth and income than is consumption demand, but that consumption demand is more sensitive to demographic variables and proximity to urban suburbs. In addition, test results indicate that the principal residence of most owner-occupiers is determined by their consumption demand for housing, not their investment demand. Hence, previous empirical housing demand studies likely to have identified the consumption demand for housing. Test results also suggest that, although the divergence between investment and consumption demand for housing is an important determinant of housing subtenure status, other factors also influence housing tenure decisions.
  • Thumbnail Image
    Property tax capitalization in a model with tax-deferred assets, standard deductions, and the taxation of nominal interest
    de Bartolome, C. A. M.; Rosenthal, S. S. (MIT Press, 1999-02)
    Previous property tax capitalization studies assume that families itemize, that they save in taxable assets, and that real interest income is taxed. However, many families do not itemize, many families invest in tax-deferred assets, and nominal interest income is taxed. As a consequence, prior studies likely misspecify the property tax capitalization equation for roughly ninety percent of their samples. Taking federal tax provisions into account increases the precision of our estimated capitalization rate. In addition, our results suggest that biases in prior studies likely contribute to the variety of capitalization estimates in the literature.
  • Thumbnail Image
    Residential buildings and the cost of construction: new evidence on the efficiency of the housing market
    Rosenthal, S. S. (MIT Press, 1999-05)
    Present value studies of asset market efficiency are controversial because they compare asset prices to unobserved discounted streams of future rents. As an alternative, if housing markets are efficient, then the price of residential capital or buildings should satisfy the following two conditions: (i) deviations between new building prices and construction costs should disappear faster than construction lags and have no effect on construction, and (ii) temporary building price shocks should dissipate at a similar rate for different vintage buildings. Results from an error-correction model support both hypotheses for single-family housing in Vancouver, British Columbia. This implies that the implicit market for residential buildings is efficient and that any inefficiencies in the housing market must lie in the market for land itself.