Abstract
A probabilistic view of the structure of urban housing markets is developed. The demand side is based on aggregate probabilistic demand functions derived from microbehavioral random utility theory. The supply side examines the short-run pricing of the housing stock by developing “asking rent theory,” which explains how a housing supplier must find the optimal rent that maximizes expected revenue. Next, concepts of aggregate market clearing and market equilibrium are defined. Finally, a two-submarket model with specific assumptions regarding the representation of demand and the nature of market signaling is examined in detail and is given a graphical illustration. In closing, directions for extending the probabilistic approach both within and beyond urban analysis are pointed out. All analysis in this paper is for a stationary urban economy, with the housing stock assumed fixed.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
