Original Research

The income and price elasticity of demand for housing in Ghana: Empirical evidence from household level data

Francis Tandoh, Devi Datt Tewari
South African Journal of Economic and Management Sciences | Vol 19, No 2 | a675 | DOI: https://doi.org/10.4102/sajems.v19i2.675 | © 2016 Francis Tandoh, Devi Datt Tewari | This work is licensed under CC Attribution 4.0
Submitted: 20 June 2013 | Published: 11 April 2016

About the author(s)

Francis Tandoh, Garden City University College, Ghana
Devi Datt Tewari, University of Zululand, South Africa

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Abstract

Housing is a challenging issue in Ghana, due to the rising demand and sluggish supply which has led to a deficit of more than two million housing units. This study aimed to estimate and analyse the determinants of the demand for housing in Ghana. The estimated elasticities show that owner and rental demand for housing is price and income inelastic. Permanent income elasticities were greater in each case than current income elasticity. The quantile regression showed that permanent income, current income and price were significant for all quantiles of housing units consumed. It is recommended that all these factors be taken into account when addressing the housing supply challenges facing Ghana to help clear the existing deficit and to provide for the anticipated increase in demand due to increasing income, since demand for housing in the country is income inelastic.


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