1 - Introduction

Abstract

This chapter presents the introduction of housing economics. Housing analysis has been a part of a number of different streams or traditions in the economics literature. There has been a macroeconomic tradition focusing on the national level of housing starts, the role of housing as a component of investment, the role of mortgage finance, and on fluctuations in housing starts especially as influenced by monetary policy. The demand for housing, either rental or ownership, has always been a part of consumer demand analysis. In most housing economics, durability is dealt with in a very simplified manner. The assumption of a homogeneous unit of housing service is retained, and there is also assumed to be a homogeneous unit of housing stock. One unit of housing service is the quantity of service yielded by one unit of stock per unit of time. Another important special characteristic of housing is that it is spatially fixed. A good deal of housing economics ignores the spatial issue and treats housing in the aspatial way of standard microeconomics. When space is introduced, the other complexities such as heterogeneity and durability are usually not incorporated.