This report presents estimated renters' and owners' demand functions for two attributes of housing that together fully compose housing: space and quality. The data came from Brown County, Wis., in 1974 and St. Joseph County, Ind., in 1975. Households' demand for space and quality is assumed to depend on their housing expenditures, household structure, tastes, and the prices of space and quality. Household structure is measured by number of members, number of children, and type of head (couple, single parent, etc.). Differences in tastes are represented by education and age. Findings showed that space is expense inelastic, so that as households increase their housing consumption a constantly shrinking proportion is devoted to space. Conversely, quality is expense elastic, so that as expenditures increase a steadily expanding share is devoted to quality. Households' characteristics also influence their choices in predictable ways. Larger families buy more space, although households with children tend to buy less space per person than households composed only of adults. Older households tend to live in dwellings that are larger than would be expected from the size of the household alone. A surprising finding was that although owners and renters have statistically distinct demand functions, virtually none of the difference in their consumption is attributable to tenure. On the average, owners buy both larger and better housing than renters, but that fact is almost entirely accounted for by their having more and larger families. The equations presented in the report can be helpful to those responsible for designing neighborhood revitalization programs and housing assistance programs. They can also be used to forecast future demand for the attributes of housing. If current trends continue, at the end of the century Americans will want dwellings that are not much larger but are much better than today's. Tables and footnotes are provided. Supplementary tables are appended. (Author abstract modified).
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