The basic assumption tested in this paper is that contrary to previous findings in advanced countries, the long-run housing elasticity in Korea is much smaller. In fact it turns out to be about 0.72. This paper examines principal reasons for low housi...
The basic assumption tested in this paper is that contrary to previous findings in advanced countries, the long-run housing elasticity in Korea is much smaller. In fact it turns out to be about 0.72. This paper examines principal reasons for low housing supply elasticity in Korea. One thing which appears to be clear is that low housing supply elasticity is not due to the housing industry's rising cost conditions. One has to look for other reasons such as the olipolistic structure of the market, taxes, regulation governing the industry and cyclical inability in dwelling construction.