Housing as an Implicit Good: Appendix A

摘要

Since housing is an indivisible good, its various measurable characteristics must be modeled as implicit goods which are traded in implicit markets. This approach contrasts with the two approaches currently being used. The widely used conceptualization of housing as a homogeneous or composite good is inappropriate because housing is not measurable along a single dimension and the use of a composite index based on multiple measured dimensions can be constructed only under very arbitrary assumptions. The view of housing as a heterogeneous good also requires the arbitrary assumption that production is nonjoint and linear homogeneous. Instead of these approaches, analysts should treat housing as a bundle of measurable implicit goods. This approach should apply to both new and existing dwellings and to the measurement of housing along both single and multiple dimensions. However, the methodologies of the study of explicit markets are not transferable to implicit market analysis. Although the unresolved problems in the analysis of implicit markets have some possible solutions, much more work is needed. Resolving these problems will permit the analysis of other types of qualitative choices in addition to the housing choice. A figure, footnotes, and 35 references are provided.