This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Google Scholar Articles by Shefer, D. Search for Related Content Social Bookmarking                   What's this?

The Demand for Housing, and Permanent Income, in Indonesia

Urban and Regional Economics, Technion-Israel Institute of Technology, Haifa, Israel

This study reports the results and conclusions derived from a data analysis of urban household expenditure on housing in Indonesia. The urban households were stratified by income group, urban size and urban location; in these respects, this study is unique. Household expenditures on housing were computed for each income group and subgroup (by urban size and location). Expenditure on housing is increasing at a faster rate than income (except in the very low income groups). The proportion of income allocated by the average household to housing ranges from less than 15 per cent to close to 25 per cent (the latter being found in the upper income group). Similarly, significant variations in household expenditures on housing are observed for urban size and location. In Jakarta, for example, the average household expenditure on housing is almost twice as much as in the small urban localities (fewer than 20000 inhabitants). This observation, however, must be mitigated by income distribution: average household income in Jakarta is almost twice that of urban households elsewhere in Indonesia. Estimates of marginal propensities to consume (MPC) housing, and of income elasticities of demand for housing, reveal that the MPC varies between 0.15 and 0.40, depending upon urban size and location. Similarly, the income elasticities vary from 0.80 to 1.20, depending upon urban size and location (in Jakarta, for example, the estimated income elasticity was found to be 1.24).

CiteULike    Connotea    Del.icio.us    Digg    Reddit    Technorati    What's this?