Article: A Structural Model of a Housing Market with Friction Author: Chang-I Hua Start Page: 397 Abstract: This paper presents a structural model of nine equations that connect the unobserved housing service and the observed house transaction markets. Endogenous variables include two prices, supply, demand, stock of houses for sale on the market, average time on the market, stock of all houses, total vacant houses, and average house size. The search process of households for houses generates a stochastic process which results in an uncleared stock of houses on the market. The friction cost is specifically measured. The model should improve many practices in housing market research, and may be extended to other durable goods markets and beyond. Keywords Housing Market, Structural Model, Equilibrium, Uncleared Stock, Friction All articles listed here are available for download in portable document format (PDF). |