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Abstract
Individual compensated demand functions must satisfy well-known properties: negative own- price effects and symmetric cross-price effects. This paper reexamines these properties for goods like housing, the prices of which vary within spatial market areas, and demonstrates how compensated demand properties must be modified to take into account the effects of endogenous location choice. It also derives Slutsky equations for both location and housing demands and applies these relationships with existing empirical estimates to evaluate the size of the compensated housing demand own-price effect with endogenous location.
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