Abstract
Despite the many studies concerning the price elasticity of housing demand, no consensus has been obtained. Disaggreements of the elasticity estimates were originated from the different method of specifying the housing price index and from different data bases. The multidimensional character of housing makes direct observation of price impossible.
In this study, four different methods of specifying the price index of housing service using the same data have been applied for the estimation on the price elasticities of housing demand both in Tokyo metropolitan area and in 10 large cities in Japan. It has been found that the price elasticities of housing demand are from -0.4 to -0.3 (Tokyo, 1975), about -0.5 (Tokyo, 1976) and about -0.2 (10 cities, 1975).
