Demand for housing attributes in developing countries: A study of Pakistan

The paper has applied a conventional framework of analysis of implicit markets to determine the characteristics of demand for housing attributes of quantity and quality in the urban areas of a large, low-income developing country like Pakistan. Income elasticities generally appear to be low, although somewhat higher for indicators of quality, Own-price elasticities are high while the cross-price effects with respect to different attribute prices reveal the high degree of substitutibility among these attributes, Methodological innovations in the paper include the use of a weighted factor score for the measurement of housing quality and incorporation of the effect of changes in non-housing prices on demand for housing attributes, Given the large magnitude of own-price effects and the negative impact of a rise in non-housing prices, it appears that in the face of slow growth in real incomes and double-digit inflation in Pakistan residential overcrowding conditions are likely to worsen over time.