Fall 2002 – Dr. Goodman

Economics 7800 - Second Project – Housing Analyses

This project is due at 10:40 on Monday, December 9, 2002. Late submissions will have their grades lowered by 1/3 of a grade per day late.

Files are in EXCEL files under:

http://www.econ.wayne.edu/~agoodman/7800/week9

The attached codebook describes the variables, which are related to housing characteristics and housing demand. These are real data, and there are some missing values.

Assignment:

You are to conduct a housing analysis using these data. I want you to consider one of the following types of analyses:

1. Demand analysis for houses – 1981 3. Demand analysis for houses – 1985 5. Demand analysis for houses – 1989

2. Demand analysis for rental units – 1981 4. Demand analysis for rental units – 1985 6. Demand analysis for rental units – 1989

You will probably wish to do multiple regression analysis. For those who are utterly unfamiliar with regression analysis, you may want to look at The Economics of Health and Health Care by Folland, Goodman and Stano, particularly Chapter 3. You may also want to view the web presentation http://www.econ.wayne.edu/~agoodman/5550/week11/555_L17, that I set up for another class. Although it uses a health example, I think that you will find it to be helpful in your work.

EXCEL has a regression package that is reasonably easy to use although somewhat inflexible. The EXCEL spreadsheet allows you to export data files to other regression packages if you prefer to use them.

I suggest that you organize the paper using the following headings:

1. Introduction and Purpose

2. Method

3. Results

4. Discussion

5. Conclusions

Write something insightful about what you did.

This is not explicitly a research paper, although 5 to 10 references may be useful. Use a standard reference style.

Although some people will probably work with each other in setting up the data, I insist on a separate submission (and separate work) from each person in the class.

10 to 15 pages (not including tables and charts) should be sufficient.

Hint: It may be very difficult to estimate hedonic price equations. As a result, it will be perfectly acceptable to use either house value, or unit rent as your dependent variable, recognizing that it is the product of price and quantity, and not using a housing price term.

Codebook for Second Urban Assignment – 1981 data

Codebook
	AGE		Age of Household Head
	AIR		1 if room air conditioners present; 2 otherwise
	AIRSYS		1 if central AC present; 2 otherwise
	BATHRMS		Number of bathrooms
	BEDRMS		Number of bedrooms used
	BUILT		Age of unit in years
	COUNTY		093 = Livingston; 099 = Macomb; 115 = Monroe; 125 = Oakland;
			163 = Wayne; 986 = Lapeer, St.Clair
	FLOORS		Floors
	GRADE1		Highest grade attended by head	1-17 = yrs.+1;18 = 1 yr. GS; 19 = 2 yrs. GS
	GARAGE		1 included in rent or value; 2 not included in rent or value
	HEQUIP		See below
	HFUEL		See below
	HHSIZE		Number of HH members
	HOWH		1 (best) to 4 (worst) on 1-4 scale
	HOWN		1 (best) to 4 (worst) on 1-4 scale
	MAR		1 = married; 2 = widowed; 3 = divorced; 4 = separated; 5 = never married
	METRO		1 = central city;7 = suburb
	MOVED		Year household moved in
	PTAX		Property tax in $
	RACE		1 = white; 2 = black; 3 = other
	RENT		Contract rent for rental units
	RMYEAR		Reference person moved here in last 12 months? 1 = yes; 9 = no or NA
	ROOMS		Number of rooms
	SEX		1 = male; 2 = female
	TENURE		1 = own; 2 = rent; 3 = no cash rent
	VALUE		Value in $
	ZINC		Income of Reference person and HH members (--9999 …. 49999) are natural.		LT -10000 à -10000 GT 50000 à 50000
Details
	GRADE1			HEQUIP
	1-17	Grade		1	Central warm air furnace
	18	1 year Graduate School		2	Steam or hot water
	19 2 or more years Graduate School			3	Built in electric
				4	Floor, wall, pipeless furnace
				5	Room heater w/ vent or flue
	HFUEL			6	Room heater w/o vent or flue
	1	Gas		7	Fireplace, stove, spaceheater
	2	Bottled Gas		8	None
	3	Fuel Oil
	4	Electricity
	5	Coal or coke
	6	Wood
	7	Other
	8	None
	99	NA

Codebook for Second Urban Assignment – 1985, 1989 data

Codebook
	AGE		Age of Household Head
	AIR		1 if room air conditioners present; 2 otherwise
	AIRSYS		1 if central AC present; 2 otherwise
	BATHRMS		Number of bathrooms
	BEDRMS		Number of bedrooms used
	BUILT		Age of unit in years
	COUNTY		093 = Livingston; 099 = Macomb; 115 = Monroe; 125 = Oakland;
			163 = Wayne; 986 = Lapeer, St.Clair
	FLOORS		Floors
	GRADE1		Highest grade attended by head
	GARAGE		1 included in rent or value; 2 not included in rent or value
	HEQUIP		See below
	HFUEL		See below
	HHSIZE		Number of HH members
	HOWH		1 (worst) to 10 (best) on 1-10 scale
	HOWN		1 (worst) to 10 (best) on 1-10 scale
	MAR		1 = married; 2 = widowed; 3 = divorced; 4 = separated; 5 = never married
	METRO		1 = central city;7 = suburb
	MOVED		Year household moved in
	PTAX		Property tax in $
	RACE		1 = white; 2 = black; 3 = native American; 4 = Asian, Pacific; 5 = other
	RENT		Contract rent for rental units
	RMYEAR		Reference person moved here in last 12 months? 1 = yes; 9 = no or NA
	ROOMS		Number of rooms
	SEX		1 = male; 2 = female
	TENURE		1 = own; 2 = rent; 3 = no cash rent
	VALUE		Value in $
	ZINC		Income of Reference person and HH members (--9999 ….999999) are natural.		LT -10000 à -10000
Details
	GRADE1			HEQUIP
	1-12	Grade		1	Central warm air furnace
	21-24	1-4 years of College		2	Electric heat pump
	25	1 year Graduate School		3	Steam or hot water
	26	2 or more years Graduate School		4	Other built in electric units
				5	Built in hot air heater
	HFUEL			6	Room heater w/ vent or flue
	1	Electricity		7	Room heater w/o vent or flue
	2	Gas		8	Portable electric heater
	3	Fuel Oil		9	Stoves
	4	Kerosene		10	Fireplaces w/ inserts
	5	Coal or coke		11	Fireplaces w/o inserts
	6	Wood		12	Other
	7	Solar
	8	Other
	9	None