This research demonstrates the households' preferences in Great Britain for climate amenities on the data collection derived from the hedonic price regression. The study concludes that British people prefer if there is more even distribution of precipitation during the seasons - drier summer season and wetter winters…
The dominant contingent valuation approach has been used for many years in the research field work in Europe and unfortunately, is very likely to continue its prevalence in the near future, too.
2. In the article Kartin Rehdanz, presents an interesting and problematic view about the climate change impact on British households. Her study is based on investigating the amenity value of climate on households in Great Britain. She applies the hedonic price approach, which traces the marginal willingness of individuals to pay for changes in the climate.
3. The article claims that climate should be regarded as amenity and thus prices for houses in geographical regions with more sunny days on average have to affect the property price. The study is unique, because it uses for the first time geographic information system to derive the data. In comparison with other researches done, this one is exceptional, because attention is paid to problems of endogeneity when applying the census tract date. Furthermore, various specifications of the climate variables are taken into consideration and at the end, the study conducts an analyses if British households will gain from the global warming.
4. One of the shortcomings of the study is that besides Maddison's empirical work in 2001, there are no other investigations made on the amenity value of climate. ...
5. The administrative boundaries create data limitations, which influence the final results and their interpretations. Thus, the evidence collected varies not only between different counties, but also within Great Britain. Roback (1982) first examined the effects of climate and how they affect both wages and the price of housing. Moreover, obtaining the required information and measures of local amenities, requires mainly distance evaluation.
6. A number of problems into this research also cause the two hedonic equations that have to be estimated. The regression analysis becomes too complicated as the two equations need to be determined.
7. All extensive data collection has to be taken from the specific local areas, which requires extra control of the variables on which the location choices are based. Therefore, the variables must be accurately chosen, to eliminate the variable biases, and to decrease the problems of multicollinearity. The further avoid difficulties in measurements, the proposal given in the articles divides Great Britain into smaller geographical areas, where the local amenities like the climate variables vary, but they are adjusted with the local housing market, because the labour market can not be modified (Englin, 1996). Gayer (2000) took an instrumental variable approach to a hedonic analysis. In his study he estimated a bi-causal relationship between house market prices and the environmental risk.
8. The starting point of all hedonic analysis if the presumption of equilibrium in hedonic markets - salary and rents are adjusted in such a way that people stay indifferent in what location they are living and working (Mler, 1977). Another problem is that ...
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housing market had repercussions leading to worldwide recessionary trends because of globalization. It all started when financial companies started depending too much on the innovation in the blind faith that it will yield returns. The symptoms of the malaise started emerging in the US mortgage business first.
Within this context of understanding, I recognize that recent shifts in the nature of the global economy have recently affected the Australian real estate market in a variety of contexts. Still, it’s clear from investigation that many of the structural elements remain in place; as such, this reports a broad overview, followed by recommendations, of the Sydney housing market.
In mean time, speculators find their way in the market believing of making profits through short-term buying and selling. This drives to an increase in demand but at some point, demand decreases or stagnates with a subsequent increase in supply resulting to a sharp drop in prices (Baker, 2008).
Many authors have conducted researches to determine which sector is dominant in housing sector as well as to identify the primary reasons behind these changes. Some of the most renowned researched covering these aspects have been presented in the subsequent part of this paper.
The author of the paper entitled "Recent developments in the UK housing market" touches upon the fact the UK economy had to face recession in the last two years which had an impact on reducing the UK house prices. It should be noted that highest growth in house prices which were significantly higher than the average UK housing prices were observed in London area.
This is because housing consumes a large part of the income of a typical household.
Both prices and quantity of houses available in the market are determined by the construction sector and households. The availability of houses in the market is largely dependent on one main variable, that is, the demographic factors governing the place.
The housing market in the UK continues to be dramatically supported by that of historically low interest rates, low rates of house building, steady income growth, and of course, positive demographics; as well, "In our modeling, even very large (by recent standards) macroeconomic shocks fail to create a significant downturn in the market." (Cameron et al, 2006).
But such was not the situation a few years back when the US housing market was at a BOOM.Looking back at the period of boom for the housing market in US we see that the interest rates were low according to the policies of Alan Greenspan, chairman Federal Reserve.
An increase in the demand for houses led to the increase in the price in the housing market, this increase in demand also led to an increase in the demand for mortgages in the United States. As a result of the increased in prices of houses in the economy the buyers increased their demand for mortgages in order to gain from the low interest rates and also added value of the houses.
Financial institutions like banks have tightened the screws as they have strengthened norms for giving loans to the loan seekers. Earlier banks were ready to give loans without seeking many evidences about the financial capabilities of the loan seeker. Now banks
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